Cargo Business Newswire Archives
Summary for November 19 - November 23, 2012:

Monday, November 19, 2012

Top Story

Port of Portland security worker strike likely November 25

Twenty-five Port of Portland security workers, members of International Longshore and Warehouse Union Local 28, will strike on November 25 if a new contract is not signed before then. Since no resolution resulted from Friday contract talks, port officials are worried that shipping lines will start to circumvent the port altogether.

If the security officials strike at Portland, it is unlikely West Coast ILWU dockworkers will cross the picket lines, which would shut down traffic at the port's three terminals altogether.

"We are scheduled to strike in nine days and have no more meetings scheduled at this time," said Local 28 steward David Vale, in an email Friday.

In a separate issue, Northwest grain terminal operators announced that they made a final offer to the ILWU on Friday. The contract expired on September 30. If the offer is not accepted, a strike or lockout is likely at grain terminals located in Portland, Vancouver and the Puget Sound.

If the contract negotiations regarding security guards and the grain dockworkers fail simultaneously, a total of seven Portland-area terminals might be impacted. Grain terminal managers, however, have already hired substitute workers in anticipation of a lock out.

Gov. John Kitzhaber "has not ruled out intervening," said spokesman Tim Raphael, "but he has confidence in the port to come to agreement with the union."

For more of the Oregon Live story:

Port of Oakland service employees begin 24-hour strike tonight

Port of Oakland workers in the Service Employees International Union Local 1021 plan to strike Monday and Tuesday, according to SEIU. Sixteen months of negotiations have not yielded a new contract plan, the union said.

SEIU announced the 24-hour strike would begin at 9:00 p.m. on Monday night at Oakland International Airport, Terminal 1.

The Port of Oakland is also currently embroiled in an investigation into alleged misuse of public funds that sprang from a $4,500 Houston strip club bill expensed to the port. Executive Director Omar Benjamin resigned last week, reportedly as a result of the scandal.

For more of the Mercury News story:

Maersk to favor investments in oil and ports over container line

A.P. Moller-Maersk will forego investing in its shipping line over the next five years and will instead favor investments in its oil, drilling rigs and port divisions, reported the Financial Times on Monday.

"We will move away from the shipping side of things and go towards the higher profit generators and more stable businesses," said Maersk CEO Nils Andersen to the Financial Times. "What we are going to do over the next five years, we are not going to invest significant amounts in Maersk Line. We have sufficient capacity to grow in line with the market."

Maersk Line, the largest container carrier in the world with 15 percent market share, has struggled with vessel overcapacity and low shipping rates due to the global economic downturn. Although container rates have gone up, leading Maersk Line to a profit in the third quarter, Andersen said early this month that rates may drop again next year on some routes.

"When we have taken that shift, probably more than 50 percent of our capital will be tied in these three other businesses," Andersen told the fiscal newspaper, referring to the oil, drilling rigs and ports divisions. "Maersk Line will then account for 25-30 percent of capital. We will have four businesses of almost equal size."

For more of the Reuters story:

Low water to curb container shipping on the Mississippi

Container shipping on the Mississippi will be limited in coming weeks due to low water, say industry and government officials, that could halt the trade of billions of dollars worth of goods.

Although official closure of the river is doubtful, next month most container carriers could be unable to navigate a shallow section of river from St. Louis to Cairo, Illinois, where water levels are predicted to reach nine feet or less by early December.

"I don't anticipate a scenario right now where I close the river," said Captain Byron Black, commander for Coast Guard's Upper Mississippi River sector. "I fully expect, as we have declining water conditions, that there will be times that, without rain, we're going to need to work with our industry partners to figure out what prudent measures we will take to be able to keep commerce flowing safely."

Such measures could include limiting tow sizes or reduced drafts, restricting navigation to one-way, or mandating that barge towboats use an assist boat as well.

For more of the Reuters story:

49 children killed in bus-train collision in Egypt

On Saturday, 51 people, including 49 school children, died when a bus collided with a train as it was crossing the track in Southern Egypt.

Egyptian roads and railways are known for their poor safety records due to a failing infrastructure that is more than 30 years out of date. The accident Saturday was the second tragic incident in two months.

Transportation Minister Mohamed Rashad Metiny requested an investigation by the national Railways System before taking responsibility for the occurrence and submitting his resignation.

For more on the L.A. Times story:


Tuesday, November 20, 2012

Top Story

Oregon state conciliator to mediate Saturday security guard contract talks to avoid Sunday strike at Port of Portland

Oregon's state conciliator, Robert Nightingale, plans to hold eleventh hour talks on Saturday to avoid a security guard strike that could deal a heavy blow to Portland shipping.

However, the damage may have already been done, as container lines decide whether to reroute cargo to less troubled ports in anticipation of Sunday's planned strike of 25 ILWU security workers at Portland.

"I am attempting to set a meeting for Saturday afternoon," Nightingale said. "That meeting will take place unless the parties come to agreement in between."

The security officers, who say they have been in contract talks with management for 16 months, guard the gates of Portland terminals 2, 4, and 6. They have been without a contract since July 1, 2011. If they strike on Sunday, fellow longshoremen will not cross the picket lines, and millions of dollars of goods including containers and autos will be stranded there.

The main issue in the contract talks is a job guarantee sought by security guards that port officials refuse to provide.

David Vale, Local 28 steward, said the officers are willing to participate in further talks. "Our union is open to compromise if the port is sincerely amenable to negotiating the job protection issue," Vale said in a statement emailed Monday.

For more of the Oregonian story:

Port of Oakland service workers launch 24-hour strike

Port of Oakland service employees launched a 24-hour strike last night at Oakland International Airport. Over 100 members of Service Employees International Union Local 1021 picketed the airport Monday night.

"We don't want people to miss their Thanksgiving, we just want them to know what we are fighting for," union spokeswoman Anna Bakalis said.

The Port of Oakland released a statement today saying normal operations are being maintained at Oakland Airport despite the strike, and that at the seaport "there have been some disruptions and impacts on truckers and longshore workers trying to get to their jobs, but it is still a very fluid situation."

SEIU Local 1021, which primarily represents janitors, electricians, security and maintenance people, is protesting alleged unfair labor practices and other concerns with the Port of Oakland board, Bakalis said.

The airport demonstration is expected to last until 9 p.m. Monday night. At 5 a.m. Tuesday, 400 SEIU workers are expected to picket at Port of Oakland Berths 57 to 59, Bakalis said. Members of other unions at the port are expected to stay home, honoring the picket line.

Port officials announced that the union would meet with an arbitrator to discuss issues that led to the contract dispute on Nov. 29 and 30 and Dec. 3.

"We have been prepared for this type of labor action and expect normal operations at Oakland International Airport," the port said in a statement, according to SF Weekly. "We are also focused on maintaining full operations in our maritime area, but are concerned about the potential impact of these actions on the many workers and business partners who are relying on the Port during this busy season of exports and holiday travel."

For more of the CBS local story:

Hanjin calls Portland union claims "fake grievances"

According to emails leaked to The Oregonian, managers at Hanjin Shipping called $728,000 in low-wage claims filed by the International Longshore and Warehouse Union "fake grievances."

Reportedly, the emails were sent before the ILWU security guard strike was planned for Sunday, and reveal the frustration the primary shipping line is experiencing over the Port of Portland's labor problems. In his Nov. 6 email, Mike Radak, Hanjin vice president, tells representatives at the Pacific Maritime Association, which is negotiating longshore contracts, that Hanjin won't pay the union claims.

"If we cannot receive the protection that we deserve from the PMA against union threats for non-bonafide reasons," Radak wrote in the email, "then we will be left to seek immediate recourse for ourselves through the federal courts."

Port officials are afraid that ongoing labor problems, including the union monetary claims that have been described as coercion by the National Labor Relations Board, will force shipping lines to leave Portland and permanently hurt Oregon's economy.

ICTSI managers say the claims made by the ILWU locals are greatly exaggerated given the sporadic nature of the work.

U.S. District Judge Michael Simon is expected to decide soon whether union claims on the shipping lines meet the legal definition of coercion.

For more of The Oregonian story:

China sees record oil imports, Frontline stock to rise 36 percent

China has diminished the tanker glut, using more and more supertankers to meet an increasing consumer demand for oil over the past five months. The rising imports will cause shares of Frontline 2012, the tanker company created by billionaire shipping investor John Fredriksen, to rise 36 percent within 12 months, according to Bloomberg analyst estimates.

Chinese imports gained 32 percent since August, according to Bloomberg ship-tracking data, and record oil demand is a sign that the nation's stalled economy is on the upswing.

"It's been a tough year, but Chinese crude demand is finally boosting rates," said Simon Newman, the London-based head of tanker research at ICAP Shipping International Ltd., a unit of the world's biggest broker of transactions between banks. "China is one of the few countries that can influence demand at short notice."

Frontline 2012 is a company that was launched with ships and orders for new vessels bought from Frontline Ltd., in which Fredriksen is also the prime shareholder. The billionaire split the company after it lost $529.6 million last year due to plunging shipping rates. Now that shipping rates are coming back, Fredriksen and his company are reaping the rewards.

Frontline 2012's six very large crude carriers, which each have a capacity of two million barrels of oil, compete for single-voyage charters and benefit when spot rates increase, according to Bjorn Kristian Roed, an analyst at Danske Markets.

For more of the Bloomberg Businessweek story:

Container with $1.4M in ivory seized by Hong Kong customs

Hong Kong customs seized $1.4 million in African ivory in a shipping container from Africa, the second time in a month a big shipment of ivory has been confiscated at the port. 2,900 pounds of illegal ivory from Tanzania was found in a container buried under bags sunflower seeds.

Approximately $3.4 million worth in ivory was discovered last month in two shipping containers last month from Tanzania and Kenya.

For more of the KTVQ story:


Wednesday, November 21, 2012

Top Story

Oakland major Quan helps striking service workers and port officials get back to contract talks

Service employees at the Port of Oakland agreed to end their strike early last night and return to contract negotiations.

Port officials and the Service Employees International Union Local 1021 agreed that Oakland Mayor Jean Quan brought the two back to contract talks. "Both sides need to come together so that the Port can continue being the economic engine of good jobs that we all need it to be," said Quan.

The contract that covered 200 port service employees, including clerical workers, janitors, security and electricians, expired last year, and a recent breakdown in talks resulted in the strike that began Monday night. Demonstrators brought port business to a halt Tuesday, with more than 100 trucks lined up outside the gate of Oakland's Terminal 1. Ships waited at six of seven terminals.

ILWU dockworkers backed up the service workers, meaning there was no one on hand to load and unload cargo. Without the longshore workers, operations at the port shut down altogether.

SEIU members stopped picketing 7 p.m. Tuesday night. According to the Pacific Maritime Association, Port of Oakland terminal operators were able to order labor in time for Wednesday's 3 a.m. "hoot shift" to resume port operations.
The Port of Oakland and SEIU are still scheduled for fact-finding hearings on November 30 and December 3.

"We are encouraged that the Port of Oakland has agreed to a path that will quickly bring us together. We hope to reach a resolution as soon as possible," said SEIU Local 1021 President Roxanne Sanchez.  

"The Port is committed to reaching a mutual agreeable contract, as soon as possible," said Deborah Ale Flint, acting executive director for the Port of Oakland.

Clerical worker contract talks breakdown at ports of Long Beach and Lost Angeles

Talks between the ILWU Local 63, which represents 600 clerical workers at the ports of Long Beach and Los Angeles, have reportedly broken down and officials are worried of a possible shutdown of the port. The Office Clerical Unit contract negotiations have been ongoing for 30 months, according to the Los Angeles/Long Beach Harbor Employers Association.

"After weeks of negotiations during which the harbor employers believed that progress had been made towards new collective bargaining agreements with the OCU, the OCU has reversed course and once again called an end to negotiations in a move signaling that further OCU-initiated disruption in the LA/Long Beach ports is likely," said association officials.

Craig Merrilees, communications director for the union, said he hasn't heard of people walking away from the negotiating table.

The Harbor Employers Association said that it has offered "absolute job security," guaranteed full-time pay, wage hikes and a one-time $3,000 payment to each permanent employee to cover missed pay increases in 2010 and 2011.

But the union wants employers to hire additional employees and is demanding stronger limits on the implementation and use of technology, after agreeing to back down on those demands, the employers group said.

The clerical workers, who have worked with no contract since July 2010, are worried about the implementation of new booking information technology that might cause management to outsource jobs. The booking technology is being used at other ports where jobs have been outsourced.

"These big international companies are guests at the ports of LA and LB that are owned by and for the benefit of the people in the community," Merrilees said. "Some of these big companies have decided that they're going to start outsourcing the good jobs that have been essential to the surrounding port communities. A strike is always a possibility if companies aren't willing to address the concerns ... of outsourcing good jobs."

Clerical workers have picketed twice already at different terminals, and in those cases an arbitrator ruled that dockworkers couldn't participate in the strike. However, a higher-level West Coast arbitrator earlier in 2012 said dockworkers could now honor the clerical workers' picket lines without violating their contracts.

For more of the Long Beach Press Telegram story:

CMA CGA third quarter profits rise

French container giant CMA CGM announced third quarter results yielded revenue of $4.2 billion, a 9 percent rise compared to the third quarter of 2011. Container volume was 2.7 million TEUs, compared to 2.6 year over year.

The shipping company's third quarter profit was reportedly $371 million, and $310 million for the first three quarters of 2012. CMA CGA said after depreciation and amortization, their operating margin was 13 percent for the quarter, the best reported in the industry.
CMA CGA generated $550 million in savings over the first nine months of the year, as freight rates improved on trade routes during the period, helping to boost profitability, the company said.

Report: Specialized reefer fleet sees record volumes, no new ships

Global perishable reefer trade increased by 54.5 million tons between 2001 and 2011 at a combined annual growth rate of 3.9 percent, with seaborne trade reaching almost 91 million tons in 2011, according to a market report.

The perishable reefer market is growing despite the global economic slowdown and future growth in cargo volumes is certain, according to "Reefer Shipping Market Annual Review and Forecast 2012/13," an annual report by Drewry Maritime Research.

The maritime perishable reefer trade grew to total 90.9 million tons in 2011, the report said. The meat category has grown the most, reporting 35.9 million tons in 2011 compared to 21.4 million tons in 2001, said Drewry. Global trade bananas/plantains grew from 13.2 million tons in 2001 to 15.7 million tons in 2011, a 10 percent jump.

Drewry predicts continued growth in reefer cargo this year, and projecting further, notes that population growth levels and GDP levels will help trade to rise at an average of over 4 percent a year to 2016.

The specialized reefer fleet continues to decline, with 234 vessels culled from the fleet in past ten years, the report said. Meanwhile there are currently no new ship orders for specialized reefer vessels.

In contrast to this the refrigerated container box fleet grew 13 percent during 2011 and ended the year at 2,048,00 TEUS, the company said. This was almost double the 6.6 pecent increase achieved in 2010 and is, in fact, one of the highest rates of annual growth ever reported for the reefer box sector.

Container carriers are talking more about the need to raise reefer rates, which will in turn raise time charter rates once demand begins to rise. This is good news in the short term for the specialized reefer fleet, the report says.


Thursday/Friday, November 22-23, 2012

Happy Thanksgiving


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