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Summary for November 7 - November 11, 2011:
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Monday, October 7, 2011

Top Story

Boehner: House likely to "move" on infrastructure bill this year

The U.S. House of Representatives are likely to "move" on an infrastructure bill this year, according to House Speaker John Boehner (R-Ohio) on ABC's "This Week" news show.

"You're going to see the House move, I think, before the end of the year on an infrastructure bill," Boehner said.

The House is reportedly reviewing legislation that would partly finance infrastructure construction through expansion of energy production.

President Obama wants a $60 billion infrastructure jobs package pushed through by Congress.

Republicans in the House are reportedly in favor of a jobs plan that comes out of a six- year surface-transportation bill.

Current federal funding for surface transport was extended through March of 2012.

For the full Businessweek story:

L.A. -Long Beach ports serve notice on impending older truck ban

The ports of Long Beach and Los Angeles served notice today that trucks with engines that date back to 2006 and older will be banned from entry to the respective Southern California cargo complexes’ marine terminals as of January 1, 2012.

Consequently, the two ports said in a statement that they will also no longer be assessing a clean truck fee on the older trucks as of the first of the year.

The ports said the PortCheck web site at that has functioned as an online payment point for the clean truck fees will remain open through January 1 for payment of billed and accrued fees.

PortCheck will refund clean truck fees that were deposited in accounts but not spent, the ports said.

UPS readies for higher holiday global package volume during "peak week"

United Parcel Service says it is hiring 55,000 seasonal workers for what the parcel carrier forecasts to be a holiday season of package volume that hits 120 million deliveries during "peak week" leading up to Christmas that would be up 6 percent over the same period last year.

UPS attributed the expected delivery growth to a recent trend of later-than-normal online shopping activity.

"Before the explosion of e-commerce, the holiday peak season stretched from Thanksgiving to Christmas; now, it's been compressed to the last two weeks before Christmas," UPS said in a statement.

UPS projects five different days where holiday package deliveries will approach or exceed 25 million -- all within the last 10 days before Christmas. Last year, there was only one day on which deliveries surpassed 25 million, the carrier said.

A delivery volume of 25 million packages represents a 60 percent increase compared to UPS's normal daily volume of 15.6 million and amounts to the delivery of almost 300 packages every second of the day.

UPS said it would also fly more than 400 additional flight segments per day during peak week.

Baltimore posts some records for 2010

The Port of Baltimore announced its public and private terminals handled 33 million tons of cargo, a 47 percent increase over 2009. The port said it also exported record volumes of coal and posted another record for salt imports in 2010, according to U.S. Census and Global Trade Atlas statistics.

The port said in a statement that it exported 13.8 million tons of coal last year, surpassing the previous record of 12.8 million tons set in 1981.

The port said it also imported 1.8 million tons of salt in 2010 compared to the previous high mark of 1.4 million tons set in 1994.

China was the port’s top trading partner in 2010 for total exported cargo, including for coal exports at 24 percent.

Monday, November 7, 2011

Private navy poised to combat piracy

A private navy that is being termed the world’s first of its kind will reportedly be ready to provide escort for merchant vessels in the Gulf of Aden within five months.

Convoy Escort Programme Ltd. is backed by the marine insurance industry and will reportedly offer seven former naval bulletproof patrol boats with armed personnel of eight per vessel.

The cost will be a reported $30,000 per ship over a three-four-day period.

For the full Businessweek story:


Tuesday, October 8, 2011

Top Story

Long Beach port commission supports Lytle to succeed Steinke

The Long Beach board of harbor commissioners announced after a closed-door meeting yesterday that they would vote next week to promote Christopher J. Lytle to the top post of the second busiest port in the U.S replacing Richard Steinke who is stepping down after a 14-year run as executive director.

"Chris' extensive public and private experience make him the ideal leader for our port," said Harbor Commission President Susan E. Anderson Wise.

"On the private side, he's operated shipping terminals around the world, and fully understands the unique issues facing public ports in California. He has a great rapport with our customers, and while he understands the industry, he's also very open to new ideas and innovations," Wise said in a statement.

Lytle most recently served as the Southern California port's deputy executive director since March 2008.

He joined the Port of Long Beach in September 2006 as one of four managing directors, overseeing trade relations and the port's operations, including communications, trade development, security and maintenance divisions.

Lytle is a former vice president of West Coast operations for France's shipping CMA CGM container-shipping group. Lytle also held executive positions at P&O Ports North America, Sea-Land Service, Inc. and APM Terminals.

Lytle holds a master's degree in business administration from the University of Puget Sound and a bachelor's degree in business administration from Central Washington University.

The formal commission vote confirming Lytle as new executive director of the port is scheduled for Monday, November 14. Richard Steinke is expected to stay in a short-term transition role, the port said.


Wednesday, October 9, 2011

Top Story

Maersk Q3 profit drops more than forecast

Denmark’s A.P. Moller-Maersk shipping and oil conglomerate posted a deeper drop in third quarter profits than what was forecast, amid softened freight rates, higher fuel prices and global economic uncertainty.

The group reported a decline in net profit to $350 million compared to $1.8 billion for the same period last year.

A.P. Moller-Maersk forecast full-year net profit in a range of $3.1 billion to $3.5 billion, compared to $5.02 billion the previous year.

"The Group's container (shipping) activities now expect a negative result for the full year as a consequence of lower rates on especially the Asia-Europe trade," the company said in a statement.

"We are on the way towards a fairly satisfactory result for 2011 especially when one takes the very low container shipping rates into account," said Chief Executive Nils Smedegaard Andersen.

The Maersk container-shipping unit had forecast a "modest positive result" for this year.

However, Maersk’s container-shipping business posted an operating loss of $216 million for the third quarter compared to an operating profit of $1.22 billion for the same period in 2010. Analysts had reportedly forecast an average operating loss of $176 million.

For the full Reuters story:

Honda might export more U.S. -made cars to South Korea

Japan’s Honda Motor Co is reportedly looking into exporting more of its U.S. -built cars to South Korea due to the strong valuation of the yen and a pending free trade agreement.

Honda CEO Takanobu Ito told reporters of the potential shift in production and shipping in Seoul, as a free trade agreement between the U.S. and South Korea looms and European competitors like BMW and Volkswagen penetrate the Asian nation’s auto market.

Toyota Motor Corp said last week it would sell U.S. -made Sienna minivans in South Korea – a first for Honda’s bigger rival.

Honda has been shipping its U.S. -built Accord model to South Korea, the CR-V, CR-Z, Insight and Civic have been sourced from Japan.

For the full Reuters story:

Wednesday, November 9, 2011

Third COSCO-operated bulker seized this year

The third bulk vessel this year operated by China COSCO Holdings has reportedly been seized over a payment dispute in Singapore.

Singapore’s sheriff’s department on behalf of an un-named company that says it is reportedly owed $1 million for the charter impounded the Song Shan Hai, a 74,000-ton bulk carrier.

"Our company chartered out this vessel to another company. The company did not abide by the contract and did not pay us," said a Hong Kong-based COSCO Holdings official in a Reuters report. "We will get it back soon," the official said.

COSCO has reportedly been stuck paying 2008 capesize charter rates due to shipping contracts that were once at $100,000 per day, but are now operating in a glutted marketplace that is now at an average price for those vessels of just $23,000 per day.

For the full Reuters story:

Taiwanese fishing crew fights off Somali pirates

The crew of a Taiwanese fishing vessel reportedly fought off Somali pirates who hijacked their boat last week.

The 28-member crew of the Chin Yi Wen had been taken hostage off the Africa’s East Coast on or about November 4 when six pirates reportedly attacked and subdued the fishermen.

The crew reportedly fought back tossing the pirates back into the ocean with their fate not known, leaving behind three injured fishermen.

For the full BBC story:


Thursday, October 10, 2011

Top Story

Maersk CEO: "We're basically destroying the price level for ourselves"

The chief executive of Denmark's shipping and oil giant, A.P. Moller-Maersk A/S, said global container lines planned for more third quarter growth, however the traditional peak season ended up underperforming, contributing to losses that included Maersk's shipping unit sliding to just under $300 million in the red.

Nils Smedegaard Andersen, in an interview with Bloomberg Television, said his company is focused on profit over market share even though the latter has reportedly grown significantly for Maersk amid the drop in freight rates.

"It's a capital intensive industry, so to be a long term leader…you can only do that when you make profit," he said.

"What has happened the third quarter this year is everybody was gearing up for peak season as we usually have it in the third quarter and this year the peak season didn't really occur so there was a lot of overcapacity and the rates dropped significantly," he said.

Andersen said that although AP-Moller Maersk's oil, offshore services, port and terminal, and container transport business volumes grew in the third quarter "it is just that the whole market had expected more growth so there's too much capacity so we're basically destroying the price level for ourselves."

As a result, Anderson said 2011 will not end up well financially for the shipping industry and he foresees a bumpy first quarter of 2012.

"We do expect the whole container industry to be…quite significantly loss-making for this year…we expect to do better than the average…but we also foresee the beginning of next year to be quite difficult," he said.

Andersen said improving service to customers with daily sailings from Asia, and ensuring on-time arrivals will help Maersk get through the early part of next year, but he added: "The industry has to clean itself by not placing orders for the [coming] years…and also for the smaller and weaker players, the time has simply come to leave the industry in my opinion."

The Maersk chief said he doesn't think a soft Q1 of 2012 will be a result of customers scaling back.

"No, our industry's growing, even transportation between Asia and Europe is growing; the situation is not bad in terms of volume, demand…it is really an overcapacity issue…of course we appreciate that we're not going to see strong growth in the coming years as long as you [have] heavy government debt and because consumers are trying to leverage in the U.S. and Europe, but every businessman has to accept that but our industries will grow anyway."

Consultants evaluate six potential deepwater containerport sites for North Carolina

Shipping industry consultants are reportedly evaluating six different potential deepwater sites for a possible new container-handling port facility in North Carolina as part of a $2 million study commissioned by the state's department of transportation.

The Wilmington Star News reports the U.S. Southeastern state is considering expansion of the existing Port of Wilmington; two sites on the Cape Fear River in Brunswick County that are 600 acres and 2,200 acres, respectively; Radio Island across from the Port of Morehead City; and properties at Bonner Bay or Parch Corn Bay on Pamlico Sound.

The final report is reportedly due in the first quarter of 2012.

Currently, the shipping channel at the Port of Wilmington's container-handling facility is at 42 feet, but deepening it could be challenging due to bedrock and related issues, the Star News reported.

At a meeting held at North Carolina's D.O.T. offices this week, the impending expansion of the Panama Canal in late 2014 for post-Panamax ships was one of the topics discussed as the state's container port does not have adequate channel depth for those vessels.

"If we don't build for the big ships, we're wasting our money," said Glenn Carlson, the North Carolina port authority's chief commercial officer.

For the full Wilmington Star New story:

U.S. Coast Guard recommends altering shipping lanes through Santa Barbara Channel

The U.S. Coast Guard has recommended an alteration of the current shipping lanes through the Santa Barbara Channel off California's coastline in order to try and prevent cargo vessels from sailing through whale feeding grounds.

The Los Angeles Times reported the Coast Guard proposal would be a combination of narrowing the shipping lanes and moving one of them to steer cargo shipping traffic away from the endangered blue, fin and humpback whale feeding grounds in the Channel Islands National Marine Sanctuary where the mammals feed on krill.

Some of the ships that are traveling to and from the busiest U.S. ports of Long Beach and Los Angeles reportedly struck and killed four blue whales near the Channel Islands sanctuary in 2007, which prompted notices for the ships to slow down when passing through.

However, the L.A. Times reports the whales have been gathering in 'dense concentrations" in the area.

The Times report goes on to say the 'Coast Guard's proposal also calls for establishing new shipping lanes south of the Channel Islands, where some freighters have been navigating to avoid the state's strict air pollution curbs, prompting complaints from the Navy that they were getting too close to military testing ranges."

For the full L.A. Times story:

It was 36 years ago today…the Edmund Fitzgerald sank with crew

It was 36 years ago today that the ore carrier Edmund Fitzgerald sank in Lake Superior during a terrible storm.

The entire crew of 29 went down with the ship a day after it departed the Duluth-Superior and a gathering of several hundred people is expected this evening at the Split Rock Lighthouse on the North Shore in Minnesota to commemorate the anniversary of the well-known shipwreck.

A ship’s bell will reportedly be rung as the names of the deceased crewmembers are read in addition to a rare lighting of the lighthouse’s beacon that extends over 20 miles out into Lake Superior.


Friday, October 11, 2011

Top Story

Senate committee provides long-term, bipartisan surface transportation plan

By Elaine Nessle, senior associate, Blakey & Agnew, LLC in Washington D.C. for Cargo Business News

For the first time since June 2009 bill language for a surface transportation authorization has been released.

Working together in a show of bipartisanship, the Senate Environment and Public Works Committee's Chairman Boxer (D-CA), Ranking Member Inhofe (R-OK), T&I Subcommittee Chairman Baucus (D-MT) and T&I Subcommittee Ranking Member Vitter (R-LA) produced bill text for their long-awaited Moving Ahead for Progress in the 21st Century (MAP-21). Originally released in outline form in July, the two-year bill provides current funding levels indexed for inflation.

Cognizant of limited monetary resources, the drafters of the bill have done a great deal of program consolidation, process streamlining and creative financing. Freight and goods movement fared well in the bill with the introduction of a new core highway program, "National Freight Network Program".

The program provides just over $2 billion for FY2012 and FY2013 each, with the money being distributed through formula funding for infrastructure improvements that strengthen our freight network, reduce congestion and increase productivity.

The bill also expands the Transportation Infrastructure Finance and Innovation Act (TIFIA) program from $112 million per year to $1 billion per year and increases the TIFIA share of a project cost from 33 percent to 49 percent.

One familiar program in the bill is SAFETEA-LU's Projects of National and Regional Significance (PNRS) grant program. While not explicitly a freight program, freight-focused projects accounted for 73 percent of SAFETEA-LU's PNRS funding. Although MAP-21's PNRS program carries the same name, the program's language is a hybrid of SAFETEA-LU's PNRS program and the popular TIGER grant program, which was first, introduced in the American Recovery and Reinvestment Act of 2009.

While the EPW committee unanimously approved the bill, it cannot move to the Senate floor prior to the Senate Finance Committee finding an additional $12 billion in offsets to pay for MAP-21.

In the other chamber, stirrings have been afoot that the House of Representatives will pass their own long-term bill prior to the end of 2011. House leadership has been working closely with House Transportation and Infrastructure Committee Chairman John Mica (R-FL) to find the necessary resources for his six-year bill, "A New Direction," which was released in outline form in July.

In a November 3 blog post, Speaker of the House John Boehner confirmed that the House would be linking energy and infrastructure in a bill to be introduced in the coming weeks. "House Republicans oppose wasteful ‘stimulus' spending, and instead favor an approach that combines an expansion of American-made energy production with initiatives to repair and improve infrastructure and reform the way infrastructure money is spent," the post stated on the Speaker's official blog.

While there is currently a great deal of momentum in Congress for passing a long-term surface transportation authorization, the Joint Select Committee on Deficit Reduction's deadline for providing recommended spending reductions and revenue increases is growing near, and could change the game completely depending on what areas they decide to trim.

Blakey & Agnew, LLC is a public affairs and communications consulting firm based in Washington, DC.

Georgia gets green light from South Carolina on harbor deepening

The staff, customers and supporters of the Port of Savannah can breathe a little easier a day after South Carolina's environmental agency lifted its roadblock to the Georgia port's harbor deepening project, although at least another $60 million has been added to the approximate $650 million project's cost.

"It's great to see the states work together. There's no doubt the region needs all the port capacity it can get. We all wanted to move this forward and not fight each other," said Curtis Foltz, chief executive of the Georgia Ports Authority.

Dredging Savannah's shipping channel from 42 to 48 feet to be able to handle post-Panamax containerships that are forecast to start calling the eastern seaboard when the Panama Canal is scheduled to be widened by late 2014 has been a 12-year journey when the U.S. Army Corps of Engineers initiated its study of the project.

Both Georgia's and neighboring South Carolina's container ports are vying for cargo from Asia amid a time of scant federal harbor deepening funds and a history of fierce competition between the two.

Last year, the Army Corps said the dredging project's environmental issues of de-oxygenated water, impact to habitat, and saltwater intrusion, could be dealt with, however, South Carolina has joint oversight of the Savannah River and its Department of Health and Environmental Control recently denied the water quality permit needed to move the Georgia port's deepening forward.

An agreement has now reportedly been reached that means either the Army Corps, if federal funds are available, or the state of Georgia, will be on the hook for an additional $1.2 million per year for the next 50 years to pay for oxygen being pumped into the river.

Environmentalists and some South Carolina legislators are reportedly not giving up on blocking Georgia's dredging project, but for now, the Port of Savannah is seeing some light at the end of its 12-year tunnel.

"This is a big step forward regardless of whatever bumps arise in the future," said Foltz.

For the full Atlanta Journal Constitution story:

Oakland's port, city apply for $40 mil grant for $438 mil Army base redevelopment

The Port and City of Oakland announced they jointly applied for a $40 million grant through the Transportation Investment Generating Economic Recovery program through the U.S. Department of Transportation in order to launch into a planned $438 million redevelopment of an army base into shipping and intermodal facilities, among other improvements.

The port said the Oakland Army Base project is to include construction of a new 40-acre intermodal rail terminal, distribution facilities, restoration of the port's breakbulk terminal, road improvements, and relocation of export-oriented recycling operations and trucking operations away from impacted neighborhoods.

"If we are successful with our grant application, we will be able to create nearly 5,000 construction jobs in the near term and thousands more good blue collar jobs in the long term," said Oakland Mayor Jean Quan in a statement.

Occupy Seattle, union members protest for better wages outside Port of Seattle centennial dinner

The Seattle Times reported over 150 protesters gathered outside a dinner celebration for the Port of Seattle's centennial on Thursday night with demands better wages for some workers at the Puget Sound port.

The $1,750-per-table dinner was held at the Bell Harbor Conference Center at Pier 66 near the port's headquarters and was sponsored by Seattle's Chamber of Commerce, the Times reported.

The protest was reportedly organized by Seattle's version of Occupy Wall Street and local unions.

One of the protest organizers told the Times that although there are several good-paying union jobs at the port, many other workers earn just $8.67 an hour.

The Port of Seattle released a statement before the dinner and protests were to take place acknowledging "the commitment and dedication of those who are exercising their right to peacefully communicate their frustration with the economic struggles of so many Americans. We share their goal of creating more good jobs for Washington."

The port said its business activities "generate nearly 200,000 jobs in Washington State - the majority of them good, family-wage jobs that have been steady even during a struggling economy."

"Many of these jobs are held by our partners in the labor community, and those partnerships have played an important role in the economic success of our region." The port said.

Last week in Oakland, Calif, several thousand Occupy Oakland and related protesters converged on the port there, shutting down its night shift.

Report: Rail theft increases in Mexico

Rail theft has increased in Mexico over the past six months, according to security tech firm Freightwatch International.

"Theft from containers has generated substantial losses to Ferrocarril Mexicano (Ferromex), Kansas City Southern de Mexico (KCSM) and their customers," Freightwatch said in a statement.

According to Ferromex, Freightwatch says the rail operator has experienced container theft losses of 7 million in 2011, the majority of which involved loads of aluminum and scrap metals.

Freightwatch said a recent Ferromex report pointed to the following locations with the highest theft rates in 2011 were Las Juntas in the municipality of Tlaquepaque, Jalisco state, the Irapuato–Apase highway in Guanajuato state, the metropolitan region of Monterrey in Nuevo Leon state, and the cities of Celaya and Salamanca in Guanajuato state.

"In Guanajuato state, groups of underage gang members have been killed during confrontations with the Federal Police. Other hot spots for rail theft are the Port of Lazaro Cardenas and close to Ciudad Valles in San Luis Potosi. Rail theft has also been increasing over the past six months in the states of Tamaulipas and Sinaloa," Freightwatch said.

"Police recently captured 45 members of an organized gang that targeted in-transit rail containers of metals passing parallel to the San Luis Rio Colorado highway in Sonora state. This large gang, which was responsible for hundreds of metal thefts, made its profits by recycling the metals," Freightwatch said.

The state of Guanajuato has reportedly been one of the most impacted areas by rail theft, with most of those incidents occurring at night when trains stop or slow down in rural areas, according to Freightwatch.

"Some families in the city of Celaya are suspected of regularly stealing corn from rail containers for years, usually to sell to local stores. Police have been blamed for turning a blind eye to these thefts, and some believe the police receive a percentage of the sale price," Freightwatch said.

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