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Summary for November 5 - November 9, 2012:
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Monday, November 5, 2012 Top StoryShipping losses from Superstorm Sandy at $1B, says consultant
"It looks like we're losing close to $80 million a day on that," said Charles Clowdis, managing director for transportation and consulting services at IHS Global Insight. "Through yesterday, we have probably lost close to $1 billion on cargo delays." Railroads and trucking companies are beginning to service the region again. The container terminals at the Port of New York and New Jersey remained closed through Saturday, with vessels rerouting to other ports. The Port Authority of New York and New Jersey said on Monday that the Port Elizabeth Terminal had opened with the arrival of vessels at the Maher and APM terminals. The Port Authority also said that the Port Newark Container Terminal and the Global Terminal in Jersey City, NJ, would open for business on Nov. 5 with ship arrivals expected at both facilities by that night. The estimated cargo losses include labor and maintenance for trucks and trains that still can't navigate flooded areas and companies that remain closed due to lack of power, according to Clowdis. Blocked cargo threatens the supply chain since manufacturers and retailers rely more on on-time shipments for their business operations, rather than stockpiling merchandise in warehouses. The shipping lanes have mostly reopened, except for a few areas around Arthur Kill south of the Goethals Bridge, and Bay Ridge and Red Hook channels, said Justin Ward, spokesman for the Army Corps of Engineers. As of Saturday, container vessels weren't yet allowed to wait for the terminals to reopen. "If you don't have an approved berth, you can't come in and sit for a week and wait for something to open," Ward says. Ships are being diverted to other East Coast ports, such as Philadelphia. For example, Evergreen Marine, a shipping company based in Hong Kong, told customers Friday that Evergreen vessels would call at Baltimore or Norfolk until the New York port is back online. Maersk Line, the world's largest container carrier, has started rerouting its cargo to Halifax, Canada, Baltimore and Philadelphia—but most of its ships are going to the Port of Virginia in Norfolk, according to the Wall Street Journal. Kevin McAleenan, acting assistant commissioner of customs and border protection, says the agency can handle more cargo than usual at other port destinations because of exceptionally high volume of goods was expected during holiday or peak season. For more of the USA Today story: www.usatoday.com Long Beach port headquarters to relocate, board vote todayAfter years of contention, the Port of Long Beach Board of Harbor Commissioners voted to consider moving their headquarters to the eastern part of the city near the Long Beach Airport on a temporary basis. The board may relocate 300 employees to 4801 Airport Plaza Drive. The vote on buying the $14.25 million building is expected to happen Monday. Since the port will need to amend its budget for the purchase, the City Council will also need to approve the purchase. The port would have to spend $9 million on renovations, according to port Executive Director Christopher Lytle, and that it would be at least six months before port staff could be moved. The board is choosing this site over the World Trade Center, a building downtown that the port didn't purchase last year because it couldn't secure the majority vote of commissioners it needed for the deal. "I'm relieved that the board has come to a point where we can bring this forward as an item on the agenda on Monday," said Commission President Susan E. Anderson Wise. "I know that everyone is very focused on making a decision that (is in) the best interest of the port and most importantly, to get our employees into a safe working environment." Port employees, who were told of the new possibility on Friday before the public announcement, have outgrown their current headquarters. But the move is not to be seen as a "done deal," since the issue of where to relocate the port staff has long been a source of contention between City Hall and the Port of Long Beach. City officials have tried to gain more control over port decision making, with the mayor vetoing a multimillion-dollar port complex in 2010 for being too expensive and criticizing the World Trade Center choice, according to the Contra Costa Times. Some port supporters have argued the nation's second busiest port should be independent from the city. For more of the Long Beach Press-Telegram story: presstelegram.com China's services industry indicates growthChina's services industry came back from its slowest growth in 19 months, expanding on manufacturing growth that indicate China is recovering after almost two years of economic slowdown, said a government statement on Sunday. The purchasing manager's index went from 53.7 in September to 55.5 in October, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. In addition to the services bounce-back, two reports showed a gain in manufacturing last week, easing the pressure for the government to roll out another stimulus package after the once-a-decade power transfer Nov. 8. "Investors expecting a big stimulus package after the Party Congress will likely be disappointed, although the new leaders will probably introduce some new projects," said Huang Yiping, chief economist for emerging Asia at Barclays. Indicators including employment and inflation "suggest that even today, growth is probably not significantly below its potential," he said. China Cosco Holdings Co. reported a small third quarter loss compared to the same period in 2011 and China Shipping Container Lines Co. returned to profit as container rates rose. "The impact of action to boost domestic demand has become more apparent and has bolstered market confidence," Cai Jin, a vice chairman at the logistics federation, said in the Nov. 3 statement. The expansion in non-manufacturing industries in October "will help consolidate the foundation for steady growth," he said. Jones Act waiver gets fuel to Northeast, gas and heating oil prices dropAfter the U.S. waived shipping requirements to get much needed fuel into the Northeast, prices for gasoline and heating oil fell. The Department of Homeland Security waived the Jones Act so that more vessels could carry fuel from the Gulf Coast to the East Coast. The Jones Act normally requires shipping companies calling between U.S. ports to use U.S.- flagged vessels only Colonial Pipeline Co. said its main line that delivers to New Jersey and terminals around New York Harbor resumed deliveries on Saturday. "The supply situation is going to improve quite a bit," said Andy Lipow, president of Lipow Oil Associates LLC in Houston. "Some of the terminals in Linden have full power. Buckeye restored to full power last night." Buckeye Partners said it has resumed operations on most of its pipelines in the Northeast. The company ships fuel from Philadelphia and New York to Pennsylvania and upstate New York, and jet fuel to New York airports. Hess Corp. said its terminal in Pennsauken, N.J. is beginning barge operations. Citgo Petroleum Corp. said most of its terminals are operating after several shut on Oct. 29 before the storm. Gasoline for December delivery dropped 6 cents, or 2.3 percent, to $2.5736 a gallon on the exchange. Heating oil for December delivery declined 8.58 cents, or 2.8 percent, to settle at $2.9474 a gallon on the New York Mercantile Exchange, the lowest level since Aug. 6. For more of the Businessweek story: businessweek.com German shipping company pleads guilty to dumping oil at seaTwo German shipping companies pled guilty Friday of dumping oil at sea and lying about it to the Coast Guard. Nimmrich and Prahm shipping company and its holding company entered guilty pleas in federal court in Houston, which include a $1.2 million criminal penalty, $200,000 of which will be given to the National Marine Sanctuaries Fund. The ship Susan K poured oily bilge water into the ocean on a regular basis for an eight-month period, according to the Justice Department. For more of the San Francisco Gate story: sfgate.com
Tuesday, November 6, 2012 Top StoryUnion-management conflicts reportedly endanger Portland shipping industry
At the North Portland container yard, trucks were backed up over the summer due to a labor disagreement between the longshoremen's union and the terminal operator over two reefer maintenance jobs. Members of the electrical union had performed the two jobs for 40 years, but due to the change to a private terminal operator, the longshoremen's union claimed the port jobs as under their jurisdiction. The National Labor Relations Board weighed in, ruling the jobs would go to the International Brotherhood of Electrical Workers. On Tuesday, the issue will end up in federal court again, where the U.S. Court judge will decide whether or not to hold the union in contempt for worker slowdowns. For the first time, port officials say they may not be able to keep Oregon's sole container terminal running. In a separate incident, dockworkers are at odds with Northwest Grain Terminal operators regarding contract negotiations. Their current contract expired on September 30th and talks, after breaking down, are now being overseen by a federal mediator. Union leaders are negotiating with terminal managers preparing for a lockout at Portland, Vancouver and Puget Sound grain terminals. If the talks do not work out, grain shipments worth $10 billion a year will be disrupted, and the union is expected to strike on land and in boats. ICTSI Oregon, which runs Terminal 6 where the reefer jobs reside, say container carriers such as Hanjin Shipping and Hapag-Lloyd might stop calling there due to increasing lost-work claims by the International Longshore and Warehouse Union. Portland union locals insist the shipping lines should pay more than $700,000, according to ICTSI, that they should have received for plugging and unplugging work being done by electricians. "If both Hanjin and Hapag decided to no longer call on T-6, ICTSI would be forced to completely suspend operations," Elvis Ganda, ICTSI Oregon chief executive, wrote in a sworn affidavit. "Alternately, should the carriers seek to hold ICTSI responsible for damages they are forced to pay the ILWU in the grievances, ICTSI would likewise be forced, by economic necessity, to suspend or drastically curtail operations." NLRB attorneys say it's illegal for the union to try to compel shipping lines, which they say are considered neutral. Union lawyers say carriers are not neutral and that shipping lines have the right to control reefer work because they own the containers. The Oregonian found a "longshore document" that reportedly suggests that one motivation for the fight over the two reefer maintenance jobs and the difficult contract negotiations could be, in part, because the ILWU has a pension that is under-funded and needs to boost its membership to compensate. For more of the Oregon Live story: oregonlive.com Some cargo from storm-beaten ports may not make it by Black FridaySuperstorm Sandy will delay container shipments at the Port of New York and New Jersey by several weeks, according to industry insiders. The closing of the ports, plus time lost by trucks unable to navigate damaged storm areas, may keep some goods from getting on the shelves in time for Black Friday. Shipping lines said a five-foot wall of water crashed into the ports, breaking vehicles, damaging cargo and causing power outages in the region. "From what we've seen with previous disasters like this. … it could delay cargo for one week to six weeks," said Timothy Simpson, a spokesman for Maersk Line North America. "Things like apparel goods are time sensitive." "We shut down a billion-dollar industry for a week — that's never happened in this country before," said Jeff Bader, president of the Association of Bi-State Motor Carriers, which represents trucking and warehousing companies. "And we are starting it back. It's going to take time, and there's going to be some bugs in it." Most Northeast ports opened over the weekend, and business came roaring back on Monday, when the trucks started pulling in with filled containers. The terminals probably won't be able to work at their normal capacity for a while, because the water, according to Bader, damaged many "top loader" cranes, which unload containers onto trucks. For more of the New Jersey.com story: northjersey.com Virginia maritime executives say government comments hurt businessVirginia maritime executives say they are having trouble marketing the port due to public comments of Transportation Secretary Sean Connaughton and Governor Bob McConnell as the Virginia Port Authority consider two privatization offers to run Virginia ports. McConnell called the Virginia International Terminals "inefficient." VIT is the port's current nonprofit operator that is competing to retain its role against the privatization bids. Connaughton said the current structure is "financially unstable." Virginia Maritime Association vice president Art Moye wrote a letter to Connaughton that says his comment was "reprinted in international trade journals and mere days later, industry officials were confronted with them in meetings in Asia." The association promotes the port and commercial shipping in the region. Moye said the comment was untrue and that it hurt Virginia's competitiveness in the international marketplace. Connaughton wrote back saying VIT and the Virginia Port Authority had operated at a loss for the past four years, even with receiving $30 million per year from the Transportation Trust Fund. He noted the trade volume losses during the recession, including a $1 million operating loss for fiscal 2012. He wrote that, due to these losses, regular maintenance such as replacing cranes has not been done. Mike Quillen, board chairman of the VPA, said both men had points he understood, but that they all needed to avoid rhetoric that would worry port customers. He said they needed to ensure that equipment was replaced as needed, but that should be a matter of course as the VPA bounces back along from the recession along with global shipping. "The viewpoint I have is with the assets and advantages Virginia has, I think we can turn it around and it'll be positive net income regardless of who the operator is, so I'm not in any kind of panic," said Quillen. For more of the Daily Press story: dailypress.com Port of New Orleans to see record 2012 container volumesThe Port of New Orleans is on pace to set records for container and cruise traffic in 2012, said port president and CEO Gary LaGrange in his annual State of the Port address. LaGrange highlighted projects completed this year, including the purchase of two new gantry cranes and adding 4.5 acres of marshaling area, a $36.4 million investment that will allow the port to raise its cargo volume. Before the expansion, New Orleans could handle about 594,000 TEUs, but with the new 4.5 acre yard, capacity has risen to 640,000 TEUs per year, setting the stage for new port jobs. The port also completed a $20.1 million renovation of the Julia Street Cruise Terminal. LaGrange said the port was on track to break the 2011 record. The largest increases were in break bulk cargo, up 23 percent so far in 2012. General cargo figures are up 8.25 percent, imported steel rose almost 33 percent, and aluminum and natural rubber imports increased by more than 8 percent, he said. For more of the The Times-Picayune story: nola.com Five die of asphyxiation aboard LPG tankerAt least five crewmembers died, asphyxiated by gas while on board an LPG ship in the Arabian Sea. The Maharshi Krishnatreya was on the way to the United Arab Emirates when the accident occurred. According to the Directorate-General of Shipping, the chief officer, a gas engineer and four other crewmembers were trying to fix a broken gas pipe in the compressor when the gas overwhelmed them. Five people died, but their names were not released. A sixth was transported by helicopter to a hospital in Porbandar. For more of the India News story: twocircles.net
Wednesday, November 7, 2012 Top StoryPort of Oakland workers protest cut benefits, alleged public fund misuse
The workers belong to Service Workers International Union Local 1021, which represents approximately 225 Port of Oakland workers who handle physical maintenance at the port and at Oakland Airport. "We have been bargaining with the port for over 15 months now," said Alfonso Loera, president of Local 1021. "Our offer to the port was very basic and simple. Cost of living, and that was it. The port took four seconds to say no, and then put down 42 takeaways." The Port of Oakland's contract changes included no more cost of living increases and a requirement for staff to pay more into their pension plans, said union officials. Port of Oakland officials said personnel expenditures were too high. "The Port has approximately $1.3 billion in debt, and faces $850 million of unfunded liabilities and non-budgeted capital needs," the Port of Oakland said in a statement issued on Monday. "Of the $850 million, unfunded pension and healthcare liabilities total over $250 million." Workers held signs that read, "Release the Secret Audit," alluding to allegations that port officials had reimbursed corporate staff for personal expenses using public funds. A number of public officials showed support for the workers, including city councilmember Jane Brunner and Ro Khanna, a former assistant secretary of commerce for Barack Obama, who joined the demonstrators. "When I worked for President Obama and he wanted the Port to increase exports, it was because he wanted to create jobs here," Khanna said. "Those jobs are good paying jobs and if the Port expects to get resources from the federal government, they need to do right by the workers who are actually making things happen, actually allowing for the export." Port of Oakland maritime director James Kwon and port director Omar Benjamin were placed on administrative leave while port officials probe a business trip to professional conference, during which maritime director James Kwon allegedly incurred a $4,500 bill at a Houston strip club that was expensed to the port. Findings of the strip club expenditure led to concerns that the problem was more widespread and an investigation was launched to look into any other possible misuse of public funds at the port. "We told the port representatives we would sit down and go over each point one by one, but no response," Loera said. "I guess they'd rather pay money out to special clubs in Houston and fancy haircuts someplace else." For more of the Oakland North story: oaklandnorth.net Ports in NY and NJ continue to recover from SandyThe Ports of New York and New Jersey were operating at 50 percent capacity Tuesday, according to the port commerce director, who said the that business will return likely to normal over the coming week. The port had to deal with problems along the way. Computer issues at Maher Terminal caused a five-mile line of trucks waiting to enter the terminal to load and unload containers to and from waiting vessels. "It was four, five six hours to get a container, and you only have eight hours in a day" said Bader, noting that a mile back-up also formed at another terminal, Port Newark Container Terminal, due to problems there. "You can't be productive on that.... We didn't expect to make any money today, but hopefully tomorrow will be okay." Four New Jersey and two New York ports were damaged to varying degrees when a Superstorm Sandy wall of water, up to 13-feet high, destroyed or damaged equipment and infrastructure, according to Richard Larrabee, port commerce director for the Port Authority of New York and New Jersey. Trucks were destroyed, electronic components of container-handling vehicles and cranes were waterlogged, 24 containers were swept into Newark Bay, and the authority's office was badly damaged, Larrabee reported, resulting in shipping delays. Twenty percent of the ports' electricity is still off. Smaller companies that lease from the port are also struggling to recover, Larrabee said. For more of the NorthJersey.com story: northjersey.com Research firm shares 2013 outlook on commercial real estateThe Ports of New York and New Jersey were operating at 50 percent capacity Tuesday, according to the port commerce director, who said the that business will return likely to normal over the coming week. The port had to deal with problems along the way. Computer issues at Maher Terminal caused a five-mile line of trucks waiting to enter the terminal to load and unload containers to and from waiting vessels. "It was four, five six hours to get a container, and you only have eight hours in a day" said Bader, noting that a mile back-up also formed at another terminal, Port Newark Container Terminal, due to problems there. "You can't be productive on that.... We didn't expect to make any money today, but hopefully tomorrow will be okay." Four New Jersey and two New York ports were damaged to varying degrees when a Superstorm Sandy wall of water, up to 13-feet high, destroyed or damaged equipment and infrastructure, according to Richard Larrabee, port commerce director for the Port Authority of New York and New Jersey. Trucks were destroyed, electronic components of container-handling vehicles and cranes were waterlogged, 24 containers were swept into Newark Bay, and the authority's office was badly damaged, Larrabee reported, resulting in shipping delays. Twenty percent of the ports' electricity is still off. Smaller companies that lease from the port are also struggling to recover, Larrabee said. For more of the NorthJersey.com story: northjersey.com Scuba divers find missing freighter with 700 tons of gold ore, no sign of crewA missing cargo vessel filled with 700 tons of gold ore was found on the sea floor by Russian scuba divers off Russia's Far East coast, the transport ministry said today. The dry-cargo freighter Amurskaya, owned by Polymetal International, disappeared last month in the Okhotsk sea. No trace of the 9-member crew was found. "Scuba divers investigated the sunken object - it is the Amurskaya freighter," the Transport Ministry cited state lifeguard services as saying in a statement. "We plan to continue work by penetrating inside the vessel." The 700 tons of gold ore is worth about $230,000, analyst Sergey Donskoy at Societe Generale said. The sunken vessel was discovered on the seabed at a depth of 25 meters (82 feet), where experts say it sunk after its cargo shifted in rough seas, quickly capsizing the freighter. For more of the Reuters story: reuters.com Submit Your Press |
Superstorm Sandy cost an estimated $1 billion in damages to the Northeast cargo industry, said an industry consultant on Saturday.
Months of labor-management friction at Portland's marine terminals may end badly for Portland shipping, since official remedies may soon run their course. 
More than 100 Port of Oakland employees picketed Friday outside the Oakland Airport to oppose cuts to their benefits and the alleged misuse of public funds by port commissioners.