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Summary for November 21 - November 25, 2011:
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Monday, November 21, 2011

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High-end toy shipments fall dramatically for holiday season

Black Friday will be here by week's end and the annual big day for holiday shoppers is expected to net more Barbies than Leapsters.

Shipments of video games are at their lowest level since 2007 and are down 42 percent from 2010 to 2011, according to the global trade intelligence platform and regular Cargo Business News Trade Trends contributor, Panjiva.

For example, shipments of the popular children's educational game console Leapster have fallen approximately 30 percent this holiday season as compared to last, according to Panjiva's data.

Even non-electronic toys like guitars and bikes have decreased 14 and 4 percent respectively over the same period last year, the Panjiva report says.

It's not just higher-end toys that are suffering - traditional pricier gift imports are down, such as cashmere at 2517 shipments from August through October 2011 representing an almost 10 percent decrease from the same period in 2010. Digital camera shipments are down 12 percent, according to Panjiva's data.

The retail sector has experienced 14 consecutive months of sales growth, according to the National Retail Federation, however consumers are reportedly concerned over the volatile stock market, higher gas and food prices, fiscal policy and shaky job growth.

"With consumer confidence questionable heading into the holidays, retailers appear to be taking necessary precautions so they don't end up losing money and stuck with surplus inventory come January," said Panjiva CEO Josh Green.

According to Panjiva's data, shipments of more traditional, affordable children's toys like Barbie and Hot Wheels, are up dramatically, while "it" toys were lagging.

Fedex, UPS raise rates for 2012

Two of the world's biggest parcel delivery companies, Federal Express and United Parcel Service, have announced they are raising rates in 2012.

Fedex announced earlier this month it would raise base rates by 5.9 percent while also decreasing fuel surcharges by 2 percent.

Last week, the largest delivery and trucking firm in the world, UPS, said it would also raise its airfreight, ground rates by 5.9 percent, with international shipping rates going up 6.9 percent.

UPS said its fuel surcharges would decrease by 1 percent on ground shipments and 2 percent for airfreight.

FedEx has said it projects Dec. 12 to be the busiest day of shipping volume in company history with more than 17 million units are moved - more than two times its average daily volume.

BNSF, UP intermodal grain exports out of Illinois exceeds expectations

Sixty million bushels of grain exports will reportedly be shipped out of the two big intermodal rail facilities in Illinois this year, far exceeding what was once predicted.

The majority of the containerized corn, soybeans departing the BNSF Logistics Park-Chicago and Union Pacific Gobal Four facility in Joliet is being railed west through West Coast ports, continuing on ships bound for Asia for such uses as cattle feed and eventually food products.

The grain exported from the intermodal logistics parks, that once would have been transferred to barges instead of trains, has doubled in the past five years and is about 20 percent of all corn and soybeans exported out of Illinois, according to Jeremy Grey, vice president for infrastructure and transportation for CenterPoint Properties, the developer of the two intermodal locations.

Shipping grain overseas via intermodal containers is a relatively new concept as Asia's demand has helped spur things forward.

"It's truly one of the few products we produce in the United States and send overseas," said CenterPoint's Grey.

For the full Chicago Sun-Times story:

Mexico looks overseas for export opportunities

The North American Free Trade Agreement has been a boon for Mexico's foreign trade to the U.S once accounting for 88 percent of the country's exports that crossed its northern border, but things could be changing amid economic instability and a possible free-trade area in the Asia-Pacific.

Mexico's exporters were hit hard by the Wall Street fiasco in the U.S. that started in 2008 causing a shift in thinking with regard to too much reliance on its primary NAFTA trading partner.

According to a Reuters report, Mexico has intensified efforts to increase trade with Latin America, Asia and Europe, as the peso has decreased against many foreign currencies.

Mexico scaled its U.S. -bound exports last year to under 80 percent of its total share and could reportedly end up at 78 percent.

"Being able to diversify Mexican exports is a priority for us," said Gerardo Gutierrez, president of the Mexican employers' association Coparmex.

"We have 12 free trade deals with 44 countries that we really don't make enough of," he said.

Mexico announced this month that it wants to join the ongoing talks that could see the creation of a free trade area in the Asia-Pacific region.

For the full Reuters story:

Ship sinks in South China Sea; 21 crew missing

A 15,000-ton cargo vessel reportedly sank in the South China Say today after departing Penang, Malaysia, with only 4 of the total 21 crew rescued by a joint maritime patrol from Hong Kong and Vietnam.

For the full Times of India/AFP report:


Tuesday, November 22, 2011

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Westbound trans-Pac carriers adopt $300-per-FEU reefer rate hike

Citing equipment and operational constraints, the group representing container-shipping lines in the westbound trans-Pacific trade announced the adoption of a $300-per-forty-foot container general rate increase that is proposed to take effect the first of the New Year.

The member lines involved with the Westbound Transpacific Stabilization Agreement said the GRI would be for all refrigerated container commodities and destinations.

"Refrigerated equipment, already in limited supply worldwide, tends to be diverted out of the trans-Pacific during winter months in the U.S. That adds to operating costs in serving U.S. export shippers of agricultural and non-agricultural commodities. The problem is compounded when equipment is pulled from more lucrative markets paying higher rates for refrigerated and other specialized equipment," the WTSA said in a statement.

WTSA members are: APL, Ltd., Hyundai Merchant Marine Co., Ltd., COSCO Container Lines, Ltd., Kawasaki Kisen Kaisha, Ltd. (K Line), Evergreen Line, Nippon Yusen Kaisha (N.Y.K. Line), Hanjin Shipping Co., Ltd., Orient Overseas Container Line, Ltd., Hapag Lloyd AG, and Yang Ming Marine Transport Corp.

Port of L.A. teams up with IAPH on global environmental index; commemorates 5 years of clean air plan

The Port of Los Angeles announced it is working with the International Association of Ports and Harbors to develop incentive program strategies for the Environmental Ship Index that is set to launch in 2012.

The EIS program is proclaimed to be an international web-based ship-rating system that ports can use to promote the use of clean ships in their harbors by rewarding operators whose vessels exceed current environmental performance standards and regulations.

Port of L.A. said in a statement that its staff presented an outline of the program to its board of harbor commissioners last week and expects to submit recommendations for participation in the program to the board by early 2012.

The port also announced it is the fifth anniversary of its adoption of the Clean Air Action Plan, the pollution reduction initiative that it says has cut harmful port-related emissions in San Pedro Harbor by as much as 76 percent.

"We've had five years of extraordinary success with the Clean Air Action Plan and now we're looking at the next generation of strategies for running the cleanest possible port and improving air quality in Los Angeles and throughout Southern California," said Los Angeles Mayor Antonio Villaraigosa.

"The Port of Los Angeles is looking forward to being part of these international standards and setting the stage for North American ports to follow suit and reward operators for greening their fleets," said Port of Los Angeles Executive Director Geraldine Knatz, Ph.D. and IAPH president.

The ESI program claims to reward voluntary, environmentally friendly engine, fuel and technology enhancements by shipowners.

The index was developed under the aegis of the IAPH's World Ports Climate Initiative.

Nine European ports in the Netherlands, Norway, Germany, Belgium and Italy have signed on to participate in the ESI.

The ESI targets primary pollutants that include nitrogen oxides (NOx), sulfur oxides (SOx), and diesel particulate.

SC governor won't testify in controversial Savannah dredging issue

South Carolina Governor Nikki Haley has declined to testify at a Senate hearing over whether she played a role in her state's environmental department's recent decision to overturn the previous denial of a water permit that now helps pave the way for the Georgia Ports Authority to dredge its shipping channel, according to a report in the Charleston Post and Courier.

Earlier this month the oversight board for South Carolina's Department of Health and Environmental Control voted to approve a water-quality permit for its neighboring state, and fierce container port competitor, that had previously been denied by the same agency at the end of September.

The Port of Savannah has long contended it needs to deepen its shipping channel to be prepared for the scheduled widening of the Panama Canal for post-Panamax vessels after 2014.

Due to shared jurisdiction, South Carolina has some say over the Savannah River's environmental regulation and most recently settled on Georgia agreeing to spend millions over the coming years to utilize technology that will pump oxygen into that marine habitat in exchange for permit approval.

The Post and Courier reports critics have lined up in South Carolina alleging that Governor Haley helped influence the DHEC's reversal of its permit decision.

For the full Charleston Post and Courier story:

Chinese investors could rescue Mitsubishi's major iron ore port project in Australia

Mitsubishi Corp is trying to get a group of Chinese investors to potentially come to the financial rescue of a fledging multi-billion-dollar iron ore port and rail project in Western Australia, Reuter's reports.

Mitsubishi's current 50-percent partner in the $5.9 billion Oakajee port, rail project and $3.7 billion Jack Hills iron ore project, Murchison Metals, has reportedly said it plans to sell its stake.

Murchison has reportedly experienced difficulty raising its share of the funding of the iron ore projects and that Mitsubishi could buy its partner out, turning to two Chinese companies to possibly become new backers: state-owned Sinosteel and Angang Steel Co.

For the full Reuter's story:

HNA logistics subsidiary seeks funds to pay back late payments to shipowners

China's state-controlled HNA Group's subsidiary, Shanghai-based Grand China Logistics Holding (Group) Co., is reportedly trying to raise funding to help it cover late payments owed to approximately 10 shipowners.

"We are actively talking to every shipowner and are actively raising funds to make payments," said the firm's president, Li Zhong, in an interview with Bloomberg.

"Give us some time and we will definitely pay the money back," he said.

Grand China's shipowner creditors include Vafias Group, Golden Ocean Group Ltd. (GOGL) and Spar Shipping A/S, according to Li.

Harry Vafias, managing director of Greece's Vafias Group, told Bloomberg that Grand China is two months behind on its five-year charter of a capesize bulker, owing close to $2.2 million.

Grand China says it plans to raise funds, offer bonds, sell ships, and renegotiate charter rates on its fleet of 70 vessels of which approximately half are leased, according to Li.

"The shipping industry isn't in good shape because of the global trade slowdown," Li said.

For the full Bloomberg story:

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