Cargo Business Newswire ArchivesSummary for November 2 through November 6, 2015:
Monday, November 2, 2015
ACL receives largest RoRo/container ship ever built
Atlantic Container Lines announced that it has taken delivery of the Atlantic Star, the first of five new vessels in the G4 fleet. The new ship sailed from China on Saturday and will join the company’s trans-Atlantic service in December.
The Atlantic Star is a first of its kind vessel and the largest RoRo/container ship (CONRO) ever built. It incorporates a design that increases capacity without significantly changing vessel dimensions.
The remaining four G4 vessels will be delivered during the first half of 2016.
G4s are bigger, greener and more efficient than their predecessors. The container capacity is more than doubled at 3800 TEUs, plus 28,900 square meters of RoRo space and a car capacity of 1300+ vehicles. The RoRo ramps are wider and shallower and decks are higher (up to 7.4 meters) with fewer columns, enabling much easier loading and discharge of oversized cargo.
Emissions per TEU are reduced by 65 percent, according to ACL. The fleet continues to employ cell-guides on deck, a feature that will allow ACL to extend its enviable record: ACL ships have never lost a container over the side during the last 30 years.
ACL’s current schedule and port rotation will be maintained until all five G4 vessels are in service. During the second quarter of 2016 ACL will announce its new G4 schedule.
ACL is a specialized transatlantic carrier of containers, project and oversized cargo, heavy equipment and vehicles with the world's largest combination RoRo/container ships. The company's headquarters are in Westfield, NJ with offices throughout Europe and North America.
Asia-Europe box rates jumped 328 percent on Friday
Container rates from ports in Asia to Northern Europe surged 327.7 percent to $988 per TEU in the week ended on Friday, a source with inside information from the Shanghai Containerized Freight Index told Reuters.
Reuters said the fourfold increase was the result of planned rate increased announced in early October by most of the largest shipping companies, according to an article in the American Journal of Transportation.
In the week ending Friday, October 30, container freight rates jumped 298 percent from Asia to ports in the Mediterranean, rose 16.9 percent to ports on the U.S. West Coast and were up 8.8 percent to ports on the U.S. East Coast.
A.P. Moller-Maersk, a shipping industry bellwether, cut its 2015 profit forecast last week by 15 percent on a slowed container shipping market.
NOL reports Q3 net loss of $96 million
Shipping company Neptune Orient Lines Ltd. (NOL) said its third-quarter net loss widened from a year earlier to $96 million, due to weak freight rates.
NOL, controlled by Singapore's state investor Temasek Holdings, reported a revenue of $1.2 billion for the third quarter, which fell 28 percent on the year.
"The absence of the traditional third-quarter peak season in Europe and North America led to severe freight rate erosion in major trade lanes," said NOL Group President and CEO Ng Yat Chung in a statement.
Norfolk Southern comments on extension of Positive Train Control deadline
Norfolk Southern Corp. issued a statement regarding enactment of a key transportation law that includes an extension of the Positive Train Control (PTC) deadline to Dec. 31, 2018.
Norfolk Southern said the enactment of the Surface Transportation Extension Act of 2015, with its provision for extending the PTC deadline to late 2018, allows them to diligently pursue implementation of PTC on the required rail lines.
Following this step by Congress and the President, Norfolk Southern has rescinded its cessation of service notice for Poisonous-Inhalation-Hazard commodities, and for passenger and commuter trains. Norfolk Southern said the government’s action makes it possible for them to conduct lawful operations beyond the former deadline of Dec. 31, 2015, maintaining full access to the rail network for customers and passengers.
Worker falls into hold of cargo ship near Houston
A worker fell into the hold of a large cargo ship near Houston last week.
Officials said just after ten a.m. a worker fell nearly 60 feet into the hull of a ship. Channelview and Cloverleaf Fire Departments were on the scene of the high angle rescue, in northeast Harris County.
Rescue crews eventually were able to pull the man through a small opening and take him to the hospital.
No details are available about his injuries or how he fell.
L.A. City Council votes to support striking port truckers
Photo credit: Random Lengths News
On Friday, striking port truckers who have accused shipping companies of wage theft took their issues to the Los Angeles City Council, where they gained new political ground for their grievances.
The City Council voted unanimously in favor of a resolution voicing support for the truckers, calling on the companies doing business at the city-owned Port of Los Angeles to follow federal and state labor laws.
The truckers also delivered a petition with 27,000 signatures from members of the pubic to Mayor Eric Garcetti's office, urging him to weigh in on the drivers' behalf as well.
Scores of drivers have been on strike this week against four freight-hauling companies they say are denying them fair pay by refusing to recognize the truckers as full-fledged employees and illegally misclassifying them instead as independent contractors.
Over 65 percent of all 75,000 U.S. port truckers are misclassified as independent contractors, according to a 2014 study by the labor-backed National Employment Law Project.
The Teamsters have rallied to the drivers' cause, winning labor contracts for 500 truckers at several Los Angeles-area shipping companies and have helped them file hundreds of wage theft claims.
Drewry: Industry faces 3 more years of overcapacity and fiscal struggle
Slowing global trade and an overfull orderbook of large vessel capacity mean that container shipping is poised for another three years of overcapacity and financial pain, according to the Container Market Annual Review and Forecast 2015/16 from Drewry Maritime Research.
The recent slowdown in global trade has caused Drewry to halve its forecast for container shipping growth for 2015 to just 2.2 percent and decrease estimates for future years. Meanwhile, an additional 1.6 million TEUs of new capacity is being added to the fleet this year, equating to a growth rate of 7.7 percent. Consequently, Drewry’s Global Supply/Demand Index, which measures the relative balance of vessel capacity and cargo demand in the market where 100 equals equilibrium, has fallen to a reading of 91 in 2015, its lowest since the recession-ravaged year of 2009.
"The container shipping industry is in the midst of an over-capacity crisis which will worsen next year," said Neil Dekker, Drewry’s director of container shipping research. "How carriers and tramp owners address the overcapacity situation will influence the duration of the crisis. Shipping lines will need to idle a much larger portion of the fleet than they have hitherto been prepared to do. Otherwise, short of an unexpected recovery in traffic volumes, container shipping is set for several years of overcapacity and mounting financial losses."
Port of Virginia poised to extend VIG terminal lease for 50 years
The Port of Virginia has extended its lease of Virginia International Gateway for 50 years from the new signing date, which is expected to come within months, according to state officials.
"For the first time, the port will now control its own destiny," said Gov. Terry McAuliffe, who announced the agreement at the Governor's Transportation Conference in Virginia Beach.
John Milliken, chairman of the authority's board, which must approve the deal before it’s official, said it is "an agreement to agree, which says, 'Here are the terms that we're prepared to go forward on, subject to a lease spelling them out in lawyer-like detail.'"
Eric Sisco, chairman of Virginia International Gateway Inc., which owns the terminal, declined to comment. Sisco signed the existing lease in 2010 as president of APM Terminals North America, then the facility's owner.
In August 2014, APM sold the terminal to Connecticut-based Alinda Capital Partners and an investment partner. Sisco was named chairman of Virginia International Gateway in January, after retiring from APM.
DP World takes full ownership of its UK Southampton port terminal
DP World announced it has acquired the remaining 49 percent stake in DP World Southampton from Associated British Ports, becoming the sole owner of the business. In addition, the port operator has made a deal with ABP to extend the license agreement for DP World Southampton for a further 25 years until 2047.
"Through full ownership of DP World Southampton, we will now be able to combine with DP World London Gateway, the newest deep-sea container terminal and logistics park at the heart of the UK’s biggest consumer markets, to offer our customers the best possible service, and long term growth, in the UK. A unique and very exciting proposition," said DP World Chairman Sultan Ahmed Bin Sulayem.
ABP chief executive James Cooper noted the deal was good news for the city of Southampton. "The deal provides a solid foundation for the continued growth and development of the UK’s most productive container port," he added.
L.A.-Long Beach port truckers end strike at 3 of 4 drayage firms
The L.A.-Long Beach port trucker strike ended at three of the four truck companies that truckers accused of wage theft, dovetailing with the Los Angeles City Council’s vote to ask port employers to adhere to labor laws for drivers.
Truckers for XPO Logistics, Intermodal Bridge Transport and Gold Point Transportation ended their five-day strike Oct. 30. The Teamsters union, which organized the protests, says these companies have misclassified truckers as independent contractors instead of employees.
On Friday the L.A. City Council unanimously passed a resolution asking L.A. and Long Beach drayage companies to comply with labor laws and port stakeholders to try and prevent strikes.
Drivers from Pacific 9 Transportation will continue their strike indefinitely.
On Oct. 30, Amazon warehouse workers employed by California Cartage ended a short strike just as 14 truck drivers filed $3.5 million in wage-and-hour claims with the California Division of Labor Standards Enforcement. Another 19 of these claims are already being processed.
Before last week, truckers had filed 705 wage-and-hour division claims. So far, the DLSE has issued 155 orders, decisions or awards, 113 of which were deemed misclassified, resulting in back wages and penalties.
Many recent DOT TIGER grant awards focus on freight
The U.S. Department of Transportation has chosen 39 projects to be awarded funds from the seventh round of the Transportation Investment Generating Economic Recovery (TIGER) competitive grant program. Of the $500 million TIGER VII awards, nearly $220 million were awarded to freight projects or projects with a strong freight element, according to the Coalition for America’s Gateways and Trade Corridors.
"Freight projects are often large-in-scale and cross multiple jurisdictions, making them difficult to fund through traditional methods," said Sharon Neely, chairman of the board of the Coalition for America’s Gateways and Trade Corridors (CAGTC). "TIGER is currently the only federal program available for complex freight projects. High demand year-over-year points to the need for a freight-specific grant program to complement TIGER."
In recent months, CAGTC says both the House and Senate have called for freight-specific competitive grant programs in their surface transportation proposals. The House Transportation and Infrastructure Committee proposed a freight grant program valued at $4.46 billion, distributed over six years. The Senate-passed DRIVE Act establishes two competitive grant programs totaling $3.3 billion as well as an $11.65 billion freight formula program, all distributed over a six-year period.
Some successful projects in TIGER VII that involve freight include:
Port of Hueneme, Intermodal Improvement Project:The Intermodal Improvement Project is meant stimulate subsequent investment from private terminal operators. "We at the Port of Hueneme are thrilled to receive a $12.3 million TIGER grant that funds a crucial component of our intermodal improvement project, a project which allows for larger-capacity vessels, increased cold storage and cargo treatment and handling capability to support increased agricultural imports and exports, as well as on-dock rail improvements for the more efficient transfer of cargo," said Kristin Decas, CEO and port director at the Port of Hueneme.
Port of San Diego, Tenth Avenue Marine Terminal Modernization Project:The Port of San Diego will receive $10 million through TIGER VII for its Tenth Avenue Marine Terminal Modernization Project. Funds will go towards increasing capacity and improving operational efficiency for Port users, according to USDOT.
Port of Newport International Terminal Shipping Facility:This $2 million TIGER grant will help construct an international deep-water marine terminal with intermodal (marine/river/highway) access at the Port of Newport, Oregon.
South Dakota DOT Freight Capacity Expansion Project:The funds from this $6 million TIGER grant will help South Dakota increase rail capacity for agricultural shippers by constructing approximately 7,000 feet of rail near Phillip, SD, and replacing about 10 miles of rail near Huron, SD.
AgT and TSA partner to address new SOLAS amendments
Members of the Agriculture Transportation Coalition and the Transpacific Stabilization Agreement have formed a working committee to create best practices and address concerns surrounding new amendments to the International Convention for the Safety of Life at Sea (SOLAS), according to a joint statement.
The amendment requires shippers and NVOCCs to supply a verified total container weight (including contents) to the vessel master and terminal operator as a condition for loading aboard a ship. The rule goes into effect July 1, 2016.
The committee brings together industry stakeholders to discuss timing, feasibility, and documentation requirements. Its membership includes 25 AgTC member shippers and truckers, eight ocean carriers, and three software providers. The statement says it may expand to include other key participants in the supply chain, such as terminal operators, port authorities, etc.
"Our ocean carrier members look forward to addressing the concerns from the shipper community to come up with a system that works for all parties," said Brian Conrad, TSA Executive Administrator. "Each carrier will implement their own protocol independently of one another, but the committee provides an exceptional forum to hear from U.S. shippers before the rule goes into effect."
A Refrigerated Cargo Sub-Committee has been established, chaired by Perry Bourne of Tyson Foods, also a member of the AgTC Advisory Board, who notes: "Refrigerated shipments are particularly complex and sensitive to any delay; our objective is to ensure that these new rules do not hinder US refrigerated exports."
Maersk Line to implement Far East Asia to U.S. and Canada GRI
Maersk Line announced it will implement a Trans-Pacific Eastbound (Far East Asia to U.S. and Canada) general rate increase for all dry cargo sailing in this lane, effective on December 1, 2015.
GRI details are as follows:
$480 per 20? dry container
$600 per 40? dry container
$700 per 40?h dry container
$750 per 45?h dry container
Ship collision halts traffic in Corpus Christi
A collision between a cargo ship and a barge in the inner harbor of Corpus Christi, Texas, caused ship traffic to be suspended last Thursday night, before reopening Friday.
According to a release from the Port of Corpus Christi, the inbound ship Ocean Freedom collided with the barge Kirby 28044, which was attached to the tugboat Nueces, about 10:25 p.m. The release stated that no fire or pollution had been reported as of 1:30 a.m.
According to the release from the Port, the Port of Corpus Christi Police Department, the Corpus Christi Police Department and the Coast Guard are investigating the collision.
The release said that the 200-foot tank barge was empty when the 503-foot Ocean Freedom collided with it. Ocean Freedom was bound for Bulk Terminal 1. The release said it looked like the barge is attached to the ship, but it was not clear if the barge was embedded in Ocean Freedom or stuck to the vessel's structure.
While ocean carriers and ports scramble to cut their greenhouse gas emissions to comply with various regulations, international organizations want them to do even more — by paying a carbon tax.
For example, as the nations of the world prepare for the major climate change summit COP21 in Paris later this month, the International Transportation Forum, an intergovernmental body of the Organization of Economic Cooperation and Development, is calling for a carbon tax on ocean shipping of about $25 per ton of CO2 to curb emissions in the coming decades. On top of that, the ITF says operators should reduce their carbon emissions by one-half over the next 35 years, and get to zero emissions by 2080.
"The impact on maritime trade would be marginal if the tax were set at around $25 per ton of CO2," ITF said in a report. The forum added that the receipts of a carbon tax could provide a "substantial source" of financing – about $26 billion – for the UN’s Green Climate Fund, and also return a portion of that money to poorer nations.
The ITF tax proposal is not exactly popular in shipping circles. In a statement last month, the International Chamber of Shipping, which represents ship operators worldwide, said the tax would be "almost three times higher than the carbon price paid by shore-based industries in developed nations."
ICS Secretary General Peter Hinchliffe added, "While shipping may currently have CO2 emissions comparable to a major OECD economy, it is inappropriate for the ITF to propose that the industry should be treated like an OECD economy."
ICS emphasized that that the shipping community is "committed to reducing CO2 and has a responsibility to contribute to the achievement of the United Nations’ ‘2 degree’ climate change goal." But the UN Framework Convention on Climate Change (UNFCCC) has recognized that "developed and developing nations should accept differing commitments, and shipping is no different, especially in view of its vital role in the movement of about 90 percent of global trade."
However, ITF’s report noted, "It would be odd if countries are expected to adhere to emission targets but not the shipping sector, especially since it would be impossible to apportion shipping emissions to countries."
"We do expect that sooner or later shipping will be regulated on CO2," said John Kornerup Bang, lead advisor on climate change with Maersk Group, owner of the world’s largest container shipping fleet. "Some carriers would be better at managing it than others," he said in a Reuters article. Maersk says it plans to reduce vessel CO2 emissions 60 percent by 2020.
According to the International Maritime Organization, shipping reduced CO2 emissions to 2.2 percent of the world’s total from 2.8 percent in the five-year period to 2012. But the IMO study projects CO2 shipping emissions could grow about 50 percent by 2050 depending on the pace of world trade and what actions are taken to curb emissions.
Ship emissions were omitted from national commitments under the UN’s 1997 Kyoto Protocol, which ceded control over the sector’s emission reductions to the IMO at that time.
Until recently, nations have generally been reluctant to take on the shipping sector on emissions in a unified way, fearing that regulations would be unwieldy to administer while potentially impacting the majority of the world’s global trade. Those days appear to be over, however.
It’s time for Plan B and maybe more. One such plan became apparent recently as 190 containerships, totaling more than 2 million TEUs, were ordered by operators during the first nine months of this year — more than the annual amount ordered in each of the last seven years, according to an Alphaliner report.
The reason? Ship orders must be placed before the implementation of the IMO’s new Tier III regulations on ship emissions. Ships with keels laid before January 1 are not required to face costly compliance mandates under new UN regulations, which cover NOx emissions.
Next: Can LNG and other alternative fuels carry the freight?
Long Beach Harbor Commission hires chief of staff
The Long Beach Board of Harbor Commissioners have selected U.S. Marine Col. Richard Jordan as the new chief of staff to assist them in governing the Port of Long Beach, effective Dec. 7.
The chief of staff coordinates all administrative and communications functions for the board, serves as a personal advisor on general issues, makes recommendations on public policy issues and coordinates trade missions and conferences, among other duties.
"Col. Jordan was selected after a careful and thorough search to find the ideal candidate," said Lori Ann Guzmán, president of the Board of Harbor Commissioners. "He has the leadership, motivation, and the tenacity needed to work with the commission, the Harbor Department’s executive team, the port’s customers and tenants, and the community."
Jordan most recently served as director of enlisted professional military education at the Marine Corps University in Quantico, Va., overseeing approximately 280 Marines and civilians at six educational academies around the globe.
Previously, he was the strategy and policy division chief for the Middle East for U.S. Central Command, from June 2011 to June 2014. In that role, he interacted on a daily basis with civilian leadership from the Office of the Secretary of Defense. He was promoted to colonel in 2011, and has been responsible for as many as 400 Marines.
Jordan deployed to Iraq as part of Operation Iraqi Freedom in 2003, 2005 and 2008. From 1993-1999 he served with a Marine Light Attack Helicopter Squadron. He joined the Marines in 1990, starting at Camp Pendleton in San Diego County, where he studied to become a naval aviator and helicopter pilot.
GEODIS completes $1.3B acquisition of Ozburn-Hessey Logistics
GEODIS has received the necessary regulatory approvals and officially completed the $1.3 billion acquisition of OHL (Ozburn-Hessey Logistics), a major 3PL based in Nashville, Tennessee, according to a company statement.
The combined structure will generate a consolidated annual turnover of over $8.7 billion with more than 38,000 employees and 165,000 customers. With approximately 400 logistics warehouses around the world, additional freight forwarding capability and e-commerce expertise, GEODIS says it is expanding its global footprint.
"The acquisition is a great achievement for GEODIS and a significant step toward our Ambition 2018 strategic plan – to be the global growth partner for our clients," said Marie-Christine Lombard, CEO of GEODIS. "This acquisition allows us to offer a market leading set of solutions on a global level with enhanced expertise at each phase of the supply chain."
Lombard welcomed Randy Curran, CEO of OHL, as a new member of the GEODIS executive committee.
"By offering GEODIS’ European customers our capabilities and opening to our U.S. based customers GEODIS’ global capabilities in the EU and elsewhere, we aim to enhance our existing customer relationships and attract new ones," said Randy Curran, CEO of OHL.
Founded in 1951, OHL operates in more than 120 distribution centers in North America with more than 36 million square feet of flexible warehouse space, and provides integrated global supply chain management solutions including transportation, warehousing, customs brokerage, freight forwarding, and import and export consulting services.
GEODIS says it offers custom solutions in over 67 countries through its five lines of business: supply chain optimization, freight forwarding, contract logistics, distribution and express, and road transport. GEODIS’s annual revenue amounts to $7.3 billion.
Rail freight drops as industrial economy weakens
Freight carried by major U.S. railroads fell by 7 percent in the second quarter of 2015 compared with the same period in 2014, confirming that large parts of the industrial economy are in recession.
The major Class 1 railroads carried 431 billion ton-miles of freight in the three months ending June, down from 463 billion ton-miles in 2014, according to the U.S. Surface Transportation Board.
Changes in freight volumes reflect broader difficulties in the industrial economy.
Rail operators have been struck by a perfect storm that has hit both their traditional and new business lines. Coal shipments to power plants, the biggest commodity on the network, have been hit by a combination of environmental regulations and low gas prices. Second quarter coal shipments were down by 27 million tons, or around 15 percent, year-over-year.
Petroleum shipments, one of the fastest growing sources of new business during the oil boom, fell more than 650,000 tons, or 5 percent, as production began to peak and new pipelines diverted crude from the rails.
And shipments of sand and gravel, a key ingredient in fracking, plunged by more than 2 million tons, nearly 14 percent, as the number of new wells drilled and fracked tumble.
At least 3 dead after Vietnamese cargo ships sinks
One mariner remains missing after the Vietnamese cargo ship Hoang Phuc 18, which was carrying 17 people and hundreds of tons of cargo, sank on the Soai Rap river off the coast of HCM City on Friday.
The bodies of three people believed to be Hoang Phuc 18 sailors were found.
Rescue teams were expanding the scope of their work to an area with a radius of 6 nautical miles from the site of the sinking.
According to Tran Minh Sang, a crewmember who was rescued from the accident, the cargo ship departed from CuongHung port in Dong Nai's Long Thanh district on Wednesday. When reaching the Soai Rap estuary, rough seas forced the ship to turn back to marking buoy No 5, waiting there for better weather.
Sang said at about 7:30 pm on Friday, when sailors were about to have dinner, a wave hit one side of the vessel, making it stagger before capsizing.