Cargo Business Newswire Archives
Summary for November 23 through November 27, 2015:

Monday, November 23, 2015

Drewry: Carrier reliability down in October

Containership reliability was down in October as the average on-time performance across all trades reached 77.9 percent, according to the latest issue of Carrier Performance Insight from Drewry Supply Chain Advisors.

The latest result is based on reliability across 10 deep-sea container trades, instead of the three East-West trades as was previously measured through September 2015, when the aggregate on-time result was 79.9 percent.

The on-time result for the East-West trades came in at 77.3 percent in October, while our first aggregate result for the seven North-South routes was slightly better at 79.1 percent.

In the East-West category, October saw worse performances in the trans-Pacific, which dropped 3.5 percentage points against September to 75.1 percent, while in the Asia-Europe trade reliability dropped by 3.0 points to 78.2 percent. On a positive note, reliability on trans-Atlantic increased 12 points in October to a series-high of 84.0 percent.

The most punctual of the "North-South" trades in October was the Asia-South Asia route with an on-time performance of 87.8 percent, while the tardiest was the Asia-Africa route that saw only 68.4 percent of voyages arrive as scheduled.

"Delays in transiting the Panama Canal may have hindered reliability of trans-Pacific all-water services between Asia and the U.S. East Coast, while in Asia-Europe the suspension of a couple of services and blank voyages will not have aided smooth operations," said Simon Heaney, senior manager of supply chain research at Drewry.

"We expected to see a decline in reliability as the container industry enters the slack fourth quarter, but it is encouraging to see that it was only marginal," added Heaney. "It is also welcome news that reliability appears to be of equal standards in both the East-West and North-South routes. We expect the slowing reliability trend to continue through to the early months of next year, but it will remain above historical performances."

Two carriers shared the top of the carrier reliability rankings in October with K Line and Evergreen of CKYH Alliance both scoring on-time performances of 85.7 percent. At the bottom of the pile was MSC, which recorded an average of 52.4 percent in the month. The trend towards more carriers improving their reliability was once again evident as 16 of the 19 carriers tracked scored at least 75 percent in October.

NW Seaport Alliance container volumes up 9 percent in October

The Northwest Seaport Alliance saw container volumes surpass the 3-million-TEU mark in October, a 5 percent year-to-date increase.

Containerized exports fueled the growth, posting a 9 percent gain over October 2014. Import volumes declined slightly, signaling the end of the peak shipping season when retailers increase inventories ahead of the holiday shopping season.

Through the first 10 months of the year, imports rose 4 percent to 1,208,091 TEUs, and exports grew 9 percent to 1,102,194 TEUs. Domestic volumes to Alaska and Hawaii remained flat, up 1 percent to 748,769 TEUs.

Auto imports also continued to post gains in October — up more than 6 percent year to date to 154,291 units — as the 2016 models began arriving. Meanwhile, year-to-date breakbulk cargo volumes and grain, log, petroleum and molasses exports continue to be impacted by a weaker export market.

The Northwest Seaport Alliance is a cargo-operating partnership between the ports of Seattle and Tacoma.

Port of Virginia sees highest monthly volume in history

The Virginia Port Authority said October 2015 was the busiest month in the Port of Virginia's history.

The port said it handled a record 233,466 TEUs in October. The previous single-month record was set in May when the port handled 230,511 TEUs.

Total cargo volumes rose by 5.6 percent, compared to October 2014. Rail units increased by 9.3 percent and truck volume was up by 3.9 percent during the period.

The port processed 4,325 vehicles in October, and according to the port release that's the highest number in October since 1988.

Judge to rule on Long Beach lawsuit against port rail yard

A judge will render a decision in the next few weeks on a lawsuit brought on by the City of Long Beach and others over a $500 million rail yard project that they say would negatively affect adjacent Long Beach and Wilmington neighborhoods.

After hearing arguments from the parties this week in Martinez, Calif., Superior Court Judge Barry P. Goode will determine whether the Port of Los Angeles and the City of Los Angeles failed to properly analyze the environmental impacts of the Southern California International Gateway project, a rail yard proposed by BNSF Railway that would allow trucks to load cargo containers and put them on trains closer to the ports of Los Angeles and Long Beach.

Long Beach and other entities suing say Los Angeles failed to require proper mitigation measures that would have lessened the project’s overall impacts, said Michael Mais, assistant city attorney for Long Beach. Those measures include landscaped buffers and the establishment of a community grant program to pay for the installation of double-paned windows and home air-filtration systems.

Goode will also determine whether the Los Angeles City Council violated petitioners’ right to a fair hearing to appeal the port’s approval of the project’s environmental impact report, and decide whether the port violated California civil rights law in approving the project.

The city, the port and BNSF Railway are prepared to fully address and refute the legal challenges by petitioners, according to Phillip Sanfield, spokesman for the Port of Los Angeles, who added that the brief jointly filed by the port and BNSF details the comprehensive technical review and public process over nearly a decade to study the environmental effects of SCIG.

For more of the Press-Telegram story:

Star Wars merchandize to boost holiday cargo at Port of L.A.

This year, it’s holiday shipments of galactic warrior helmets and light sabers that will boost toy import volumes at the Port of Los Angeles, according to trade economists.

Merchandise from "The Force Awakens," the seventh "Star Wars" movie that will hit theaters this holiday season, is expected to give a double-digit boost to toy volumes shipped from overseas, according to trade economists. Most of the toys from overseas come through the Port of Los Angeles.

Market research firm IHS, using data from international shipping industry tracker JOC Group, said in a report that toy imports are expected to grow 10.9 percent this year. That’s partially due to consumer demand for toys from next month’s highly anticipated "Star Wars" movie, which are bulky and take up more room on ships.

Toys from China accounted for 84 percent of those imported to the U.S. between January and September of this year, making it America’s largest toy supplier.

For more of the Los Angeles Business Journal story:


Tuesday, November 24, 2015

NOL in exclusive negotiations with CMA CGM

Neptune Orient Lines said on Saturday it has entered exclusive talks with France's CMA CGM over a prospective acquisition of NOL-APL.

NOL-APL, controlled by Singapore’s Temasek Holdings, said in a statement it had entered into exclusive talks with the world's third-largest carrier until Dec. 7.

The Singapore carrier, which has suffered from the downturn in the global shipping market, said this month it was in preliminary discussions with both CMA CGM and A.P. Moller-Maersk.

CMA CGM could not be immediately reached for comment.

For more of the Reuters story:

Port of Long Beach may reduce "free time" to improve cargo flow

To increase velocity of cargo moving out of the Port of Long Beach, officials say they will consider reducing the amount of time import containers can be stored on docks without charge.

Since 2005, the length of time containers can stay on the dock, called "free time," has been four days. Beyond that, terminals are charged storage fees. With bigger ships regularly calling the port, more containers sit at terminals, inhibiting the ability of workers to deliver containers quickly and efficiently.

Port officials are proposing changing free time to six shifts, the equivalent of as few as three days, to encourage terminals to more consistently operate at night, moving imports off the docks faster.

"When containers stack up in terminals, it leads to extra handling that makes the process slower for longshore workers, the shippers that depend on them, truckers who move the goods, and ultimately the consumer," said Port of Long Beach CEO Jon Slangerup. "This approach will keep the system more fluid and help avoid congestion."

In the coming weeks, port staff will work with all stakeholders to develop a final proposal for the Board of Harbor Commissioners to consider.

"Truckers have told us their containers are not always accessible because of fewer evening shifts, and terminal operators want to clear space in their yards while giving their customers enough time to get their cargo," said Port of Long Beach Chief Commercial Officer Dr. Noel Hacegaba. "Our idea, ‘flexible free time,’ is an innovative use of the tools we have to balance those needs."

TransPacific carriers release recommended rate increases for 2016-17

Member shipping lines in the Transpacific Stabilization Agreement have announced a phased increase in rates and a package of 2016-17 service contract guidelines intended to ensure improved pricing predictability and service reliability.

First, TSA lines are recommending adjustments to minimum rates across the board, on December 1, 2015 and on January 1, 2016.

For December 1, the lines will be seeking to restore the lowest current market rate levels to at least $950 per-FEU to the U.S. West Coast; $1,700 per-FEU to the U.S. East and Gulf Coasts; and $2,950 per-FEU for intermodal moves to key Chicago-area inland point destinations.

For January 1, TSA members are recommending that a general tariff rate increase be filed in the amount of $1,200 per-FEU to the West Coast and $1,600 per-FEU to the East and Gulf Coasts. Carriers say their objective is to establish more compensatory baseline revenue levels as they head into service contract negotiations, and in advance of the Lunar New Year holiday in Asia that begins in early February.

"Transpacific lines are adjusting to a new normal of larger ships and complex alliances, necessitated by cost and environmental compliance pressures – all in the context of an uncertain global economic environment," explained TSA Executive Administrator Brian Conrad. "Irrespective of cyclical supply-demand issues, it is critical that these global infrastructure providers get their pricing right and fully recover their costs through meaningful, staged rate increases heading into 2016."

For all 2016-17 service contracts that largely take effect on May 1, TSA lines are recommending longer-term minimum rates of $1,700 per-FEU to the West Coast, and $2,900 per-FEU to the East and Gulf Coasts. In addition, the contract program will include adjustments to non-rate charges and practices in areas such as absorption of chassis costs; free-time allowances; port and rail demurrage charges; equipment detention and per diem; full recovery of current and projected trucking costs; intermodal pricing; credit policies; and contract boiler plate terms.

TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S. TSA members include APL Co., China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, Kawasaki Kisen Kaisha (K Line), Maersk Line, MSC, N.Y.K. Line, OOCL, Yangming Marine and Zim Integrated Shipping Services.

CMA CGM profits fall sharply in Q3 on low freight rates

CMA CGM, the world's third-largest carrier, said freight rates should recover next year after a market downturn led to a sharp fall in its third-quarter profits.

The shipping line said its third quarter core earnings before interest and tax fell 36.5 percent to $158 million year-over-year, while consolidated net profit, group share dropped 74.8 percent to $51 million.

Revenue was down 9 percent at $3.977 billion, with the company saying a 3.4 percent rise in volume helped limit the sales decline.

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, hit a new all-time low on Friday, pulled down by a vessel glut and slowing industrial demand from China.

"Freight rates are expected to remain weak in the fourth quarter of 2015. The market should rebalance during 2016," family-owned CMA CGM said in its third-quarter results statement on Friday.

The slide in freight prices has added pressure on a shipping sector grappling with overcapacity and CMA CGM, like container shipping market leader Maersk Line, has tried to use larger ships and consolidation to ride out the downturn.

The company did not give guidance for its full-year results but said it expected to "continue to outperform the industry average going forward."

For more of the Reuters story:

60-hour Kenyan traffic jam impedes truckers

Trucks stuck for 60 hours in a Kenyan traffic jam got moving again Friday after officials opened another route, but trucking companies said they had lost millions of shillings in trade.

Heavy rains swept away a stretch of road, blocking lorries carrying goods to and from the Indian Ocean port of Mombasa, choking the main trade route into East Africa.

A day later, the tailback of around 1,500 trucks was 30-miles long, with many drivers stranded without drink or water.

"Our trucks did not move for over 60 hours. That is a lot of lost time and money in any business. We are still tabulating the figures but be sure we are talking about millions of shillings worth of losses," Willingtone Kiberenge, acting chief executive of the Kenya Transporters Association, told Reuters.

Country officials eventually diverted traffic to another route set aside for a railway project as contractors started repair the road from Mombasa to the capital Nairobi.

"We have managed to get vehicles moving," said Kwale county commissioner Evans Achoki.

Mombasa is a gateway for fuel and other essential goods to other parts of Kenya, Uganda, Burundi, Rwanda, South Sudan and eastern Democratic Republic of the Congo.


Wednesday, November 25, 2015

NY/NJ Port Authority executive director resigns

Patrick Foye, who served as executive director of the Port Authority of New York and New Jersey when the agency was plagued by a scandal involving lane closures on the George Washington Bridge, ordered by allies of New Jersey Governor Chris Christie, is resigning.

Foye, appointed by New York Governor Andrew Cuomo in 2011, has said he learned of the September 2013 lane closings four days after they began.

The agency that operates New York City’s marine terminals, three major airports, Hudson River crossings as well as the World Trade Center site is searching for a new chief executive officer to replace the agency’s executive director and deputy executive director who are typically hired by political appointment.

Foye asked that his name be withdrawn from the running for CEO and said he wouldn’t participate in the search. He wrote that he would remain at the agency for the next 120 days to transition to new leadership.

Earlier this month Governors Christie (NJ) and Cuomo (NY) announced an agreement with the federal government to fund two new tunnels under the Hudson River. The port authority will help to staff a new agency that oversees the $20 billion project.

The search for a new CEO will be extended in light of the port authority’s new role on the Hudson River tunnel project, known as Gateway, the Port Authority said. Agency officials interviewed eight to 12 candidates, but reportedly weren’t satisfied with the choices.

"He (Foye) was able to move the Port Authority’s staff in a positive direction and did that against the great problems of lack of effective leadership from either governor," said Jameson Doig, a professor emeritus at Princeton University and author of "Empire on the Hudson," a history of the port authority. "I’m sorry that he won’t continue because there’s a great advantage in having the same person in office for a period of years, but I think the commissioners are working hard to get a successor who will be as good as Pat."

According to Crain’s New York Business, Port Authority Chairman John Degnan said the board is going to hold out for someone with the "unique skill set to function well in a public agency," with "private-sector experience," "excellent CEO leadership skills" and "the ability to oversee construction of some of the most important infrastructure jobs in the country."

For more of the Bloomberg story:

Higher imports buck long-term trend at Port of Charleston

Imports are up at the Port of Charleston, with imports coming into the U.S. far outpacing exports in recent months, according to new statistics.

"It’s absolutely opposite of what we think the long-term trend is going to be, which is further growth in manufacturing and further growth of exports," said Jim Newsome, president and CEO of the S.C. State Ports Authority.

In October, the SPA unloaded 74,046 TEUs at the Port of Charleston, compared to 59,961 boxes shipped to other countries. That disparity — 14,085 more import TEUs — was the biggest since July.

Newsome said the car industry would continue to boost import growth as Volvo and Mercedes-Benz Vans build Charleston regional manufacturing plants scheduled to open in 2018.

"Automotive companies source engines and transmissions overseas for vehicle manufacturing," Newsome said.

Greer-made BMWs lead the way for Ro-Ro cargo, with more than 20,000 vehicles exported from Charleston each month.

Foreign economic uncertainty is also causing an imbalance between inbound and outbound shipments. Newsome said there’s significant slowdown in some of the major exports to emerging-market economies, noting the strong dollar seems to be having a short-term impact on U.S. exports to Europe.

China is the biggest concern because it is the No. 1 foreign consumer of South Carolina-made goods.

Newsome said he has given up on trying to forecast China’s economy. And a report this month by commercial real estate brokerage CBRE Industrial Services takes a "don’t worry, be happy" attitude toward the so-called slump in the world’s second-largest economy — from 7.4 percent growth last year to projected gains of 6.6 percent in 2015 and 5.9 percent next year. The U.S. economy, by contrast, is on track for 2.4 percent growth in 2015.

For more of The Post and Courier story:

Maersk intends to boost rates on Asia-Europe trades

Maersk Line, the biggest container line in the world, plans to raise spot freight rates sharply on major routes from Asia to ports in northern Europe, effective Dec. 1, the company said on Tuesday.

Spot rates for TEUs will rise by $1,000, Maersk Line told customers in a recent letter.

The intended price increase is equivalent to a 339 percent increase from current levels, if the rate-hike sticks. Container rates usually rise in big jumps announced by the shipping companies before gradually easing back over time.

Savannah adds avocados to perishable imports

Peruvian avocados from Mission Produce are now being received through the Port of Savannah.

"Importing avocados through Savannah was a first for Mission Produce, and for the avocado industry," said Jose Maldonado, director of global logistics and transportation for Mission Produce. "During the Peruvian season, we brought containers through Savannah to give us quicker access for our customers in the Southeast."

With farms located in the La Libertad region, near the city of Chao in Peru, Mission Produce ships avocados to the U.S. from May through September.

"Adding Savannah as an import location to serve the Southeast means fewer road miles, lower transit costs and fresher produce," said GPA Executive Director Curtis Foltz. "Garden City Terminal’s refrigerated cargo infrastructure is unmatched on the U.S. East Coast."

Savannah’s Garden City Terminal offers 94 refrigerated container racks and 733 chassis plug-ins, powering 2,989 refrigerated boxes at a time. Another 10 racks will be complete by the end of the year, adding 240 slots for perishable goods.

"Because of Georgia’s central location within a large and growing market, combined with anticipated growth in farm output, we’re expecting to move more cargo through Savannah next year," Maldonado said.

In addition to operations in Peru, Mission Produce ships avocados on a year-round basis from multiple countries, including the U.S., Mexico, Chile and New Zealand.

The Georgia Ports Authority moved nearly 140,000 TEUs of refrigerated cargo in fiscal year 2015. The GPA anticipates a 4.5 percent growth rate of refrigerated cargo in the next year.

Cold Train files amended lawsuit against BNSF

Cold Train filed an original $41 million lawsuit in April of 2015 against Burlington Northern Santa Fe (BNSF) Railway in the U.S. District Court in Spokane, Washington for damages incurred for having to shut down the Cold Train Express Intermodal Service in 2014.

Steven Lawson, former president and CEO of Cold Train, and Mike Lerner, managing member, filed an amended complaint for damages on November 20 in U.S. District Court that details further BNSF actions that allegedly caused Cold Train's demise, according to a company statement.

The amended lawsuit states that BNSF engaged in unfair and deceptive trade practices and violated the Washington Consumer Protection Act by wrongfully requiring Lerner, Lawson and Cold Train to agree to a 95 percent carriage requirement, which effectively prohibited Cold Train from using other rail carriers.

The Cold Train lawsuit claims as the direct result of an abrupt service change and BNSF's refusal to revise its wrongful 95 percent carriage requirement despite promises to the contrary, Federated Railways withdrew its offer to purchase Cold Train.


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