Cargo Business Newswire ArchivesSummary for November 3 through November 7, 2014:
Monday, November 3, 2014
Corps repairing Port of L.A.-Long Beach breakwater
Photo credit: U.S. Army Corps of Engineers
The Army Corps of Engineers announced they would repair the breakwater that protects the Ports of Los Angeles and Long Beach as early as December.
Legislators, port officials and other stakeholders have encouraged the Army Corps to fix the breakwater, worrying that operations at the port complex would suffer if it wasn’t fixed. Although the breakwater is currently working, a significant wave or storm event could compromise its functionality, according to the Corps.
Of the three breakwaters that protect the ports, Long Beach and San Pedro, the Middle Breakwater was damaged the most by Hurricane Marie’s 15-foot waves, suffering 1,550 feet of major damage, 850 feet of significant damage and 1,725 feet of moderate damage, according to the Corps.
Greg Fuderer, spokesman for the federal agency that owns the breakwater, said the contractor is about three weeks into repairing the breakwater’s 12 most severely damaged breaches and is on track to finish the work by late December to early January.
"We’re making good progress," said Fuderer, who was at the construction site Wednesday to survey the work. "We’re optimistic about meeting that target."
The $5 million, 90-day contract was awarded Sept. 18. It involves delivering up to 30,000 tons of rocks on a barge from the rock quarry at Catalina’s Pebbly Beach to the breakwater, and then a crane will lay down each 8- to 15-ton stone in the gaps, piece by piece.
In his last breakwater report, port Chief Executive Jon Slangerup said damage to Long Beach port roads and structures were estimated to be at least $4.4 million, including $3.5 million in dike repair to the Navy Mole, a man-made peninsula in front of the former Naval Shipyard, and Pier F.
He added that port tenants suffered at least $3 million in damages, including Sea Launch, the U.S. Maritime Administration, Pacific Container Terminal and Total Terminals International.
A deadline for a strike by workers at the St. Lawrence Seaway that was set for just past noon on Friday has been extended through the weekend, according to the union representing workers.
Five Unifor locals along the seaway from Niagara to Montreal announced Tuesday they were serving 72 hours’ strike notice along the waterway, which links the Great Lakes and the Atlantic Ocean.
The union said the new strike deadline of 5 p.m. Monday was served to Seaway management Friday morning during ongoing contract talks in Cornwall, Ontario.
One of the key issues in contract talks is staffing levels at the locks as the seaway moves to hands-free mooring, eliminating staff. The union is calling for minimum staffing levels on the locks to deal with emergencies.
Labour Minister Kellie Leitch said earlier this week that the Canadian government was "disappointed" to hear that the St. Lawrence Seaway Management Corp. and Unifor have not come to terms on collective agreements.
"I strongly encourage both parties to continue negotiating to find a solution that will benefit everyone," Leitch said in a statement Wednesday.
The St. Lawrence Seaway, which extends from Montreal to mid-Lake Erie, includes 13 Canadian and two U.S. locks.
CJ Korea Express considers acquiring NOL’s APL Logistics
CJ Korea Express considering its options regarding Neptune Orient Line’s APL Logistics unit, including acquisition or forming a strategic alliance, it said in an exchange filing on Oct. 16.
Neptune Orient may start the sale of APL Logistics as early as the end of this month, according to an inside source, and sale of the unit could top $1 billion.
Neptune Orient Lines, the biggest container line in Southeast Asia, is expected to post a fourth consecutive annual loss this year on slowed economic growth and excess capacity. The company said in August that it was considering options for APL Logistics, including a sale or initial public offering.
NOL told Bloomberg in an e-mailed statement there haven’t been any material developments on its review of the business and there’s no assurance a deal will be completed.
"The logistics business has been a consistent profit generator," said Jon Windham, an analyst at Barclays in Hong Kong. Companies with logistics business in North America, such as APL Logistics, will be attractive for investors as manufacturing gets decentralized from China, he added.
Neptune Orient posted a loss of $152 million in the first half. APL Logistics posted $32 million in core earnings before net finance, tax and exceptional items, while the container shipping business had a loss of $112 million.
CJ Korea Express has said it’s interested in growing its business and has been looking at acquisition opportunities.
Truckers pushed out of B.C. port license system to receive transition funds
Container truck drivers shut out of the new Port Metro Vancouver licensing system designed to reduce their numbers will be eligible for transition payments of up to $15,000, according to a port letter to the industry.
The amount is inadequate compensation considering the size of investment they put up to get into the old system, according to Manny Dhillon, a spokesman for the United Truckers Association that represents the non-union container-truck drivers.
Too many trucks vying for too few containers was cited as one of the problems that contributed to the low pay and long waits that plagued port drivers and triggered a strike that lasted 28 days in March.
Now the port wants to cut about 500 trucks from the fleet of 2,000 that are now licensed to access its four container terminals, and will accomplish this by scrapping old licenses and making trucking companies and owner-operators re-apply.
Owner-operator drivers who don’t receive a new license will be paid an amount calculated by considering the number of trips they were making in and out of the port and prevailing per-container pay rates over a given period, said Peter Xotta, vice-president of planning and operations at Port Metro Vancouver.
"It’s intended not to replace income for a job, for ongoing employment," Xotta said. "It’s simply a transition plan for independent operators who are displaced. Our hope is that they can find employment outside of the sector."
The hope is to have the new system to come into force Feb. 1, 2015, when drivers would apply for new licenses.
The Municipality of Anchorage wants to recover up to $340 million via two lawsuits it has filed against those involved in the failed Port of Anchorage Intermodal Expansion Project.
The city hopes to recover a combined $300 million in Alaska U.S. District Court from project manager Integrated Concepts and Research Corp., former port designer PND Engineers and CH2M Hill Alaska, which now owns dock design consultant VECO Alaska, according to municipal counsel Bennett Greenberg.
The three companies are defendants in a lawsuit filed in March 2013. The second suit seeking financial damages was filed against the U.S. Maritime Administration in Federal Claims Court in February 2014. MARAD oversaw the project from 2003 to 2012 and hired ICRC, which subsequently chose PND to draft plans for the dock.
The case is scheduled to go to trial in October 2015.
Cargo flows stall at ports of Seattle and Tacoma on BNSF delays
The newly consolidated ports of Seattle and Tacoma are being thwarted in their efforts to regain market share from Canada as railcars sit idle on tracks across the U.S. Pacific Northwest.
The massive increase in shipments of Bakken crude from North Dakota is straining the resources of BNSF, causing delays that have shifted cargo traffic to ports in Canada.
For the week ending Oct. 25, BNSF reported that 615 of its loaded grain cars and 103 intermodal cars, or shipping containers put onto rail, sat for 120 hours or more. Union Pacific, the other major West Coast railroad, says it had 144 loaded grain cars and 74 intermodal cars stalled for the week ending Oct. 24.
"We were turning away business," Frazier said. His company transfers grains, peas and lentils from hopper railcars into containers for export. His customers racked up $170,000 in extra storage bills in September, up from $30,000 in July, he said.
The railway jams are complicating the Washington ports’ efforts to reverse losses in market share to Canadian harbors that have developed more modern infrastructure for rail shipments.
In the U.S., shippers of grain, coal and other commodities have complained to regulators of poor service from BNSF, and in June the U.S. Surface Transportation Board ordered railroads to report plans for resolving the backlogs.
The National Corn Growers Association wrote to the Surface Transportation Board Sept. 4, citing a North Dakota State University study that estimated farmers in that state alone have lost $67 million because of rail shipment delays.
At the Port of Tacoma, the advertised five-day rail journey to the U.S. Midwest is taking seven or eight days because of a shortage of rail cars and crews, said spokeswoman Tara Mattina.
In September, as many as 150 grain cars piled up in nearby rail yards, according to Dale Frazier, manager of Seattle Bulk Shipping Inc.
Customers "are experiencing gradual improvements" and "have our continued commitment that we will add the resources necessary to handle all of our customers’ business," said BNSF spokeswoman Courtney Wallace on Oct. 30.
This year, BNSF plans to spend $1 billion of it to improve and expand lines between the Northwest and Chicago, Wallace said. Projects include adding two new staging tracks near Everett, Washington, and improving a rail yard in south Seattle.
While containerized cargo volumes moving through North American West Coast ports have almost doubled since 2000, the Puget Sound’s market share has dropped to 9 percent from 15 percent, according to the Port of Tacoma. Seattle and Tacoma said Oct. 7 they would merge the planning, operations and marketing divisions of their cargo terminals.
BNSF is the main carrier of crude from the Bakken shale formation centered in North Dakota to oil refineries in Washington State. The amount of oil hauled by trains in the U.S. rose more than 40-fold to 407,761 carloads in 2013 from five years earlier, according to the Association of American Railroads.
Port Everglades moved a record amount of containerized cargo in the fiscal year ending Sept. 30, handling more than 1 million TEUs for the first time, according to preliminary data released Monday.
"This is a huge accomplishment for our seaport and a credit to our customers who continued to build their businesses through the global recession with an eye toward the future," Port Everglades Chief Executive Steven Cernak said in a statement.
Port Everglades handled 1.01 million TEUs for the year, according to preliminary data, almost evenly split between imports and exports.
Gains came both from new and existing services, according to Cernak. King Ocean recently opened a second terminal yard and consolidated business from Miami. And the Grand Alliance, including Hapag-Lloyd and other partners, completed their first full year of a northern Europe service.
Hundreds of port truckers rally in B.C. for fair legislation
Hundreds of container truck drivers gathered in Surrey, B.C. Sunday, with concerns about how proposed legislation to reduce the number of port drivers should be brought in.
Unifor, the union that represents some of those drivers wants to make sure the rollout is fair to those hauling goods in and out of Port Metro Vancouver.
Gavin McGarrigle, head of the union’s B.C. office, says there needs to be a method to fairly transition drivers out of the system — the port intends to implement a new licensing system that will see the number of drivers drop by 500 or 600.
"We certainly support less drivers so that there can be more stable work, and we just want to make sure that they do it fairly. There’s going to be significant changes, the details haven’t been fully fleshed out yet, but it’s safe to say that the entire system is being overhauled," McGarrigle says.
McGarrigle adds drivers are worried about companies not paying correct rates, and about retroactive payment of rates negotiated back in March.
"Overall there’s a real concern that you know, sort of the second they let down their vigilance, that the government will be more friendly to the trucking company owners than in fact the drivers."
He says today’s meeting was an opportunity to show there is a lot of unity in the sector, and that there will be more meetings with the port and with government.
Developers and business owners who invested in property and businesses in Port Royal, expecting an economic boom from the sale of the former port there, are suing the S.C. Ports Authority.
They allege the authority has mismanaged the sale of the 317-acre former port and failed to follow the "prudent-man rule," a concept of common law that requires trustees, such as a state agency, to handle assets as a thrifty person would. The lawsuit says the Ports Authority has mismanaged state assets and "created circumstances that prevented the required sale to occur."
Among the allegations is that Beaufort County and the town of Port Royal have lost more than $7 million in property taxes by the land remaining in state hands, and the stalled sale has likewise stalled the town’s economy.
"The claim has no merit, and the matter has been referred to attorneys," Ports Authority spokeswoman Erin Dhand. "The SCPA will not comment further on pending legal actions."
The port has been vacant since 2004, when it was decided it was too expensive to operate. The authority was ordered to sell the land, but three attempts since 2006 have fallen through.
Cargo ship crew cleared after food poisoning incident
The 680-foot Liberian bulk carrier cargo ship Agapi S continued its voyage to New Orleans after 19 of 21 crewmembers with symptoms of food poisoning were cleared following a medical treatment near San Juan, Puerto Rico Saturday, according to the U.S. Coast Guard.
Coast Guard Sector San Juan received notification from the master of the Agapi S at 11p.m. Friday, when he reported crewmembers began showing signs of food poisoning Friday shortly after eating fish caught by the crew.
Two doctors were transported by tugboat to the ship, where they were able to treat the ill crewmembers on board. The ill sailors responded to treatment and it was determined they didn’t need to be hospitalized, the statement said.
"The prompt and thorough coordination between all federal and local authorities and Luis Ayala Colon Shipping allowed for 19 mariners to receive needed assistance and ensure the operational safety of the Agapi S," said Cmdr. Kailie Benson, Sector San Juan chief of prevention.
Wednesday, November 5, 2014
Freight forwarders call for end to unjustified shipping line surcharges
The International Federation of Freight Forwarders Associations, also known as FIATA, says it’s time for the world's container carriers to provide clearer explanations of the growing variety of surcharges that they apply.
FIATA is a trade association that represents the world's freight forwarders and logistics service provider, covering approximately 40,000 forwarding and logistics firms that employ around 8 to 10 million people in 150 countries.
Robert Keen, chairman of FIATA's Multimodal Transport Institute, said in the statement that forwarders are used to currency and fuel surcharges, but need more transparency when other surcharges, often with questionable names and purposes, are charged to freight forwarders.
"In the past, we have seen administration fees, peak season surcharges, or ISPS-add on surcharges," said Keen. "Of late, we have had examples of container cleaning fees and container sealing fees, without any evidence of the expense actually being incurred."
FIATA notes the recent advent of port congestion surcharges caused by labor unrest, as well as haulage surcharges resulting from HGV driver shortages—charges that are difficult to understand since there is no explanation and little justification for an additional charge for a service that the container line is finding difficult to provide.
Keen, who is also director general of the British International Freight Association concludes: "It is time for freight forwarders to stop accepting at face value opaque and unjustified surcharges."
China to spend $16.3B on new Silk Road infrastructure
As China’s President Xi Jinping continues his plans to revive the centuries-old Silk Road trading route, the nation is planning a $16.3 billion fund to finance construction of the necessary infrastructure to connect its markets to three continents.
The fund will be used to build and expand railways, roads and pipelines in Chinese provinces to facilitate trade over land and shipping routes, according to government officials who helped create the plan.
Officials who asked not to be named said that policies would soon be implemented to encourage Chinese lenders to finance infrastructure in countries along the route connecting China to Europe. They said Chinese companies would also be encouraged to invest in the countries and bid for contracts.
The New Silk Road plan envisions an economic cooperation bloc through to the Mediterranean that involves maritime and land routes that will revive the old Silk Road, where trade helped develop civilizations along the route.
"Previously, China focused on attracting foreign investment, but now the shift is being made -- China’s more and more encouraging its capital to go abroad," said Feng Yujun, senior researcher at the China Institutes of Contemporary International Relations in Beijing.
Xi is trying to shape China as a great power, restoring its maritime dominance in the Asia-Pacific and extending its political and economic influence across the region, which has manifested itself in territorial spats.
The fund will finance domestic infrastructure construction and will be overseen by Chinese policy banks including China Development Bank, officials said. They also said that financing will be limited to regions outlined in the Silk Road plan: Central Asia, the Middle East, South Asia, Southeast Asia and parts of Europe.
New rail shipping route in Washington State operational
On Monday the first railcars hauling North Dakota crops arrived at the Port of Vancouver in Washington State as part of an agreement between the port and North Dakota.
The agreement between the port and the state was reached in August to give farmers another shipping option and relieve the current rail-shipping backlog.
Rail cars were sent to North Dakota delivering products such as lumber, paper, cement, fertilizer and energy supplies. The cars were sent back carrying split green peas.
Farmers haven’t been able to ship crops at the rate they’re being produced. As of Friday, BNSF Railway had an outstanding order of 3,509 cars in the state, with an average delay of two weeks. Canadian Pacific had outstanding orders of 2,529 cars with an average delay of 2.14 weeks.
Though the shipments are still being made on BNSF rail lines, North Dakota farmers now have 180 boxcars dedicated to a return trip to the Pacific Northwest, according to the Port of Vancouver.
The agreement has begun with two shuttle trains a month, which will eventually grow to four. There are 392 elevators in the state that could take advantage of the agreement.
Crowley benefits from FECR intermodal facility at Port Everglades
The opening of Florida East Coast Railway's new, high tech intermodal container transfer facility next to Crowley Maritime’s Port Everglades terminal allows Crowley to provide more efficient cargo handling and faster deliveries since containers no longer need to be trucked to and from an off-site rail terminal, according to an FECR statement
The railroad says the strategic location of its 43-acre near-dock facility lets Crowley handle bigger, heavier break bulk and out-of-gauge cargo in a cost effective manner because of the shorter distance required for transit.
"As one of the FECR's largest intermodal customers, the location of the new ICTF is a win-win, not only for Crowley, but also for our shipping and logistics customers who are now benefitting from faster and more efficient cargo handling," said Bob Weist, Crowley vice president. "The decision to open the facility in such close proximity to ours is illustrative of the importance of our partnership."
Crowley has been one of FECR's largest intermodal customers since the company established a terminal in south Florida.
In addition to international business, FECR said it has also relocated its existing domestic intermodal service to the ICTF, further reducing roadway traffic in the area.
"Our investment in this state-of-the-art facility increases FECR's available intermodal capacity from 100,000 to 450,000 lifts a year, which is expected to result in more containers moving on FECR instead of the congested highways and improving the efficiency of our intermodal network," said James R. Hertwig, president and CEO, FECR.
Live beetle larvae found in container from China
Live larvae of a destructive beetle have been found in a U.S.-bound shipment of rain ponchos from China.
Customs and Border Protection officials say agriculture specialists found the khapra beetle larvae while inspecting a truck entering the U.S. from Canada across the Lewiston-Queenston Bridge north of Buffalo last week.
They say three live larvae where found in an ocean container.
PMA accuses ILWU workers in Seattle and Tacoma ports of staging slowdown
Port operators claim that dockworkers at the ports of Seattle and Tacoma have begun a work slowdown, in what would be the first union labor action since the contract of West Coast Longshore workers expired in July.
The union denied the claim, asserting the false accusations were a way for port management to change the conversation from their chronic cargo bottleneck problems and would likely delay current contract talks.
The slowdown by members of the International Longshore and Warehouse Union slowed container movement from 25-to-35-per-hour to 10-to-18-per-hour, the Pacific Maritime Association said Monday.
The two Washington ports handle about 16 percent of container traffic on the West Coast, according to the PMA, which represents terminal operators and shipping lines in the ongoing West Coast contract negotiations.
The ILWU issued a statement late Monday, calling the PMA's charges "dishonest." In a statement, the union said the association's "media offensive" would delay a labor agreement. And a spokesman said the accusations serve to deflect attention from a growing congestion problem at West Coast ports.
Union spokesman Craig Merrilees had no comment when reached by telephone at the organization's San Francisco headquarters.
"In Tacoma, the ILWU is not filling orders for skilled workers, including straddle carrier operators who are critical to terminal operations," Wade Gates, a spokesman for the maritime association, said in the statement. "This is like sending out a football team without the receivers or running backs. You can't run the plays without them."
At the Port of Tacoma, most terminals "are still open, but they are experiencing backups," spokeswoman Tara Mattina said. Port of Seattle spokesman Peter McGraw referred questions to the maritime association's statement and declined further comment.
The contract talks involve dockworkers at 29 West Coast ports. Both parties agreed on a provisional deal regarding health-care expenses in late August, without providing details. Other issues include how to retrain and preserve jobs for dockworkers as automation reduces the number of positions, along with wages and work rules.
Retailers have worried about the impact delays will have on the Christmas shopping season.
Brazil has unconditionally cleared the planned integration of the container shipping activities of Compańía Sud Americana de Vapores into Hapag-Lloyd, according to a Hapag-Lloyd statement.
Hapag-Lloyd and CSAV signed a binding business combination agreement in April 2014, subject to the approval of regulatory authorities.
Among others, the Department of Justice of the U.S., the European Union and Chile have already cleared the planned transaction. The approvals of a few jurisdictions are still pending, according to the statement
Hapag-Lloyd said the transaction would make the company the fourth largest container shipping company in the world, with 200 vessels, an annual transport volume of 7.5 million TEUs and a combined turnover of approx. $11 billion.
COSCO chair: Shipping industry downturn to last 2 more years
The global shipping market probably won’t experience a recovery during the next two years on an oversupply of vessels, according to the chairman of China's largest shipping group.
Battling overcapacity since the 2008 financial crisis because new vessels ordered prior to the downturn are now flooding the market, Chinese ship builders continue to struggle to make a profit.
Ma Zehua, the chairman of China Ocean Shipping Group, told reporters at a conference that his firm was focused on cost control, maintaining long-term customers and expanding in emerging markets, such as South America and the Middle East, to offset the slump.
"I don't think the market will recover within the next two years," he said. "There are a lot of new building orders, which means the chances of the supply-demand imbalance improving soon are small."
COSCO Group is the juggernaut of China’s shipping industry, controlling more than 800 vessels and managing six listed firms. China COSCO, the group's flagship firm, narrowly escaped delisting by selling off assets when it posted a narrow profit in 2013, after two consecutive years of losses. Three straight years of losses can trigger delisting from the Shanghai stock exchange.
As part of a government effort to consolidate China's shipping industry, Ma said the company would soon announce partnerships with other large Chinese shipping firms.
The gap between imports and exports rose by 7.6 percent to $43 billion in September, the Commerce Department reported on Tuesday.
Most economists thought September would post a deficit similar to the $40 billion in August, but weakening economic conditions in Europe, a slowdown in Asia, and a stronger dollar hit American exporters, while improving conditions for U.S. consumers and a steady reliance on imports from China and Asia caused the trade deficit to rise.
Analysts asserted that the U.S. dollar, at a four-year high in this week’s trading, is handicapping American exporters by making their goods costlier abroad.
The U.S. saw its trade gap widen in newly industrialized nations. Economists predicted that free trade agreements between the U.S. and these countries would cause rising demand for U.S. goods there, but the reverse is true. The U.S. saw 26 percent growth month-over-month in its trade gap with South Korea, and an 11.3 percent rise in its trade gap with Taiwan.
U.S. exports fell 1.5 percent to $195.6 billion in September, the lowest level since April this year, after reaching a record in August. Imports were steady at $238.6 billion despite declining demand for autos, fuel, and capital equipment.
Over the weekend the Coast Guard responded to a grounded fuel barge near Kodiak.
The USCG sent a C-130 Hercules Airplane and the cutter Spar to respond to the incident Saturday morning. Though the 400-foot fuel barge had managed to refloat itself after getting stuck, responders mounted boom and towed the vessel into Kodiak for a damage inspection.
As of Monday, a Coast Guard official says dive inspections haven’t revealed any damage to the hull or signs of leaked contaminants, and the Marine Safety Detachment is investigating the cause of the grounding.
The barge was carrying 2.2 million gallons of aircraft fuel to the Coast Guard’s Air Station on Kodiak.