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Monday, November 22, 2010

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Trans-Pacific shipping lines lay out possible 2011 rate hikes

Citing “an early end” to the peak season, the ocean carrier members of the Trans-Pacific Stabilization Agreement (TSA) laid out what they termed a “voluntary guideline contract program” for 2011-2012 that could include containerized rates going up $400 per-FEU for cargo moving from Asia through U.S. West Coast ports, and $600 per-FEU for all other cargo by May 1, 2011.

“After two quarters of healthy revenues, an early end to the trans-Pacific peak season has left that trade lane lagging relative to other Asia container markets, while operating costs continue to rise,” the TSA said in a statement.

The TSA members said they have “recommended full recovery of costs for other equipment sizes, and improved collection of floating bunker and inland fuel charges as well as Panama Canal, Alameda Corridor and other fixed accessorial charges.”

The carrier group said they have also “called for adjustments to store-door delivery rates as warranted, to levels that adequately compensate carriers for rising costs in providing those services.”

Looking ahead to 2011’s shipping rush, the TSA members said they might also levy a peak season surcharge of $400 per FEU, effective from June 15, 2011 through November 30, 2011, subject to an adjustment based on changing market conditions.

The TSA group said it “noted a dramatic trade-wide improvement in the supply-demand situation for freight shippers during 2010. Asia-U.S. cargo growth for the year has been surprisingly strong, and is forecast to settle near 12 percent by year-end.”

Referring to a report by the Paris-based shipping consultancy AXS Alphaliner, the TSA said trans-Pacific capacity grew 18.6 percent since November 2009, with the first three quarters of this year bringing 15 new and restored services, and three new operators to the trade, saying this was partly due improved rate levels.

The TSA lines say they are forecasting 6-9 percent containerized cargo growth from Asia to the U.S. in 2011.
“Meeting that demand and covering contingencies for a possible stronger recovery will require sustained revenue improvement,” they said.

“The trans-Pacific market is clearly returning to some kind of ‘normality’, with the U.S. and Asian economies still closely linked and imports from Asia still vital to U.S. consumers and businesses,” said TSA chairman and Hanjin Shipping Co. Ltd. CEO Y.M. Kim.
“Maintaining a stable infrastructure for the movement of goods is no less important today than in past years, and that will take sustained levels of carrier investment over time,” he said.

“Carriers have experienced solid revenue growth across their entire networks in 2010, but two strong quarters in the transpacific – a highly competitive freight market with very thin margins – still do not fully offset two years of heavy losses,” Kim said.

“We said last year that we would not seek to recover all our losses in one year,” he said.

The TSA’s executive administrator Brian M. Conrad said a number of operating costs have continued to rise steadily, including labor, container handling, inland transport, and both purchase and leasing of container equipment during what has been a widely reported global shortage of such equipment.

The TSA membership includes: APL Ltd., Kawasaki Kisen Kaisha, Ltd. (K Line), China Shipping Container Lines, Maersk Line, CMA-CGM, Mediterranean Shipping Co., COSCO Container Lines, Ltd., Nippon Yusen Kaisha (N.Y.K. Line), Evergreen Line, Orient Overseas Container Line, Inc., Hanjin Shipping Co., Ltd., Yang Ming Marine Transport Corp., Hapag-Lloyd AG, Zim Integrated Shipping Services, and Hyundai Merchant Marine Co., Ltd.


Port of Long Beach and Caltrans to unveil new $1 bil bridge plans today

Plans are being unveiled in Long Beach for a billion-dollar bridge to replace a crumbling span near the Queen Mary.
The California Department of Transportation and the Port of Long Beach will show off the design plans on Monday.

The structure will replace the Gerald Desmond Bridge, which was built in 1968. City News Service says that bridge is so decayed that nets are slung under it to catch chunks of falling concrete.

The new design will be wider and higher to accommodate cargo vessels.

Construction is expected to begin next year, with completion in 2016.

-AP/San Jose Mercury News

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Samsung among S. Korean officials visiting D.C. to protest new U.S. regs on lithium-ion battery shipments

South Korean officials will visit Washington Tuesday to protest at proposed new rules on lithium-ion battery shipments that could cost major exporters hundreds of millions of dollars a year, the government said.

US regulators are set to toughen rules on how the batteries and devices containing them are shipped on cargo planes amid concerns the products may catch fire and cause an aircraft to crash.

The rules require shippers to treat cellphones, laptops and other popular gadgets like iPhones as hazardous materials, with the full weight of regulation and added costs coming with the new classification.

The regulations, proposed by the US Department of Transportation, are being reviewed at the White House Office of Information and Regulatory Affairs.
Seoul officials and industry members will visit the agency Tuesday to express opposition, the Knowledge Economy Ministry said.

Industry representatives include those from Samsung Electronics, the world's second-largest mobile handset maker, and the number three LG Electronics, said Park Young-Sam, a ministry official in charge of the matter.

-MSN News

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UPS selling logistics technology unit

United Parcel Service Inc. said Friday it agreed to sell its logistics-technology unit to private equity firm Thoma Bravo LLC.

Financial details were not disclosed.

About 145 people work for the UPS unit, which is based in Baltimore. It creates routing and fleet-management systems designed to help customers burn less fuel and improve driver productivity.

After the sale closes, which is expected by year end, the unit will be renamed Roadnet Technologies Inc. UPS said the unit's chief operating officer, Len Kennedy, will become CEO.


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U.S. warns of potential al-Qaeda-linked threat through Middle Eastern, African shipping lanes

The United States has issued a new warning to ships passing through critical shipping lanes in the Middle East and along the African coast after confirming a terror attack took place there this year.

The Abdullah Azzam Brigades, a group based in southern Lebanon that is linked to al Qaeda, claimed in August that a suicide bomber had attacked the Japanese tanker the M. Star on July 28.

The United States has now determined that the claim is valid, according to a statement from the U.S. Maritime Administration.

It warned ships that the group "can conduct further attacks on vessels in areas of/in the Strait of Hormuz, southern Arabian Gulf and western Gulf of Oman."

The explosion on the M. Star injured one crew member but did not cause a spill or halt shipping traffic.


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