Cargo Business Newswire Archives
Summary for December 1 through December 5, 2014:

Monday, December 1, 2014

WTO secures historic trade deal to expedite the flow of goods

Photo credit: Reuters/Denis Balibouse

On Thursday the World Trade Organization adopted their first global trade agreement in a deal that introduces new standards for customs checks and border procedures. Advocates of the deal say it will streamline trade flow, adding up to $1 trillion and 21 million jobs to the world economy.

The historic trade deal -- the first in the history of the WTO -- finally validates the ability of the organization to broker a substantive agreement after years of impasse, months of deadlock and a last minute objection.

"We have put our negotiations back on track," said WTO Director-General Roberto Azevedo at a news conference held after trade diplomats applauded their first major accomplishment. "We cannot wait another 17 or 18 years to deliver again."

U.S. Trade Representative Michael Froman said the agreement was "particularly important win for small and medium-sized businesses in all nations." He noted it could substantially reduce transaction times and costs and would unlock new opportunities for both rich and poor countries.

The reform package adopted on Thursday is widely seen as opening up progress for further global negotiations, the details of which will be formulated by July 2015.

For more of the Reuters story:

CMA CGM acquires German "short sea" fleet

French shipping giant CMA CGM said it has purchased Germany’s Oldenburg-Portugiesische Dampfschiffs-Rhederei GmbH for an undisclosed amount.

CMA CGM plans to use OPDR’s "short sea" fleet to provide cargo for its giant container ships. OPDR owns five small container ships and charters three more, each able to carry around 700 TEUs. It mainly moves cargo from Northern European ports to Spain, Portugal and Morocco.

"This is a continuation of our strategy to broaden our regional network, a strategy which began with the acquisition of MacAndrews in 2002," said Farid Salem, CMA CGM group executive officer.

CMA CGM has made comparable purchases in the past, including London-based MacAndrews & Co., Africa-focused Delmas of France; Australia’s ANL; U.S. Lines of Santa Ana, Calif.; and Taipei’s CNC.

For more of The Wall Street Journal story:

Matson to raise freight rates by 5.4 percent

Matson Navigation will raise the freight rates for its Hawaii service by $225 per westbound container and $110 per eastbound container. The approximate 5.4 percent increase will go into effect January 4, 2015.

"This rate increase will help offset rises in operating costs and support ongoing investments in our Hawaii service," said Dave Hoppes, senior vice president, ocean services. "The adjustment is consistent with our longstanding philosophy of implementing modest, incremental increases as necessary to maintain the highest levels of service, and is identical to increases implemented in 2012, 2013 and 2014."

The rate hike will be filed with the Surface Transportation Board.

For more of the Hawaii News Now story:

Shipbroker Clarkson expects to buy investment bank RS Platou for $440M

Global shipbroker Clarkson expects to buy Norwegian brokerage and investment bank RS Platou for $441 million, in a deal that would create one of the industry’s biggest players.

The agreement, to be completed in the first quarter of 2015, is occurring just as the shipping industry is recovering from a 5-year downturn. Large numbers of vessels were ordered between 2007 and 2009, just as the global economy started to tank, creating sector-wide ship overcapacity. World trade has picked up since then and the glut of ships is now slowly being absorbed.

Clarkson, like many shipbrokers, believes that larger operations with global teams is the best way to position itself for a full market revival. The enlarged group will offer shipping and offshore services, with a London base and operations across 21 countries.

"It places the combined business in the number one position in offshore broking and the number one position in shipbroking with very little overlap," Clarkson Chief Executive Andi Case said to Reuters. "A good healthy market has good healthy participants. The industry needs to consolidate."

For more of the Reuters story:

"Corpse ship" discovery upsets Chinese community

The S.S. Ventnor sank 112 years ago off the northern coast of New Zealand, carrying the exhumed bodies of 499 Chinese miners, some in wooden coffins and others in sealed zinc caskets.

The men had been mining for gold in New Zealand, and had paid in advance to ensure their bodies would be returned to China.

A team led by amateur New Zealand filmmaker John Albert found what is thought to be the wreck in 2012, raising hopes that the remains might finally find their way home.

Albert’s work, including a news conference publicly announcing the wreck's discovery last week, has upset some members of New Zealand's Chinese community, who say he removed artifacts from the wreck without consulting them.

"I went to the media conference and had no idea what was going on. I was shocked and disappointed that we hadn't been consulted and hadn't been informed beforehand," said Virginia Chong, the previous president of the New Zealand Chinese Association. "The bodies and bones on that ship are our ancestors, our people."

Albert said he did speak to a number of people in the Chinese community. He plans to make a documentary about the Ventnor.

For more of the AOL News story:


Tuesday, December 2, 2014

Drewry: Shippers turn to airfreight to avoid port delays

Many shippers are temporarily shifting to airfreight to deliver their eleventh hour holiday shipments in order to avoid chronic congestion and labor slowdowns at U.S. ports, according to this week's issue of Container Insight from Drewry Maritime Research.

For a number of years, global air cargo growth has trailed behind container shipping, analysts report, due to high demand for commodities that are usually shipped by sea, faster growth of low-value commodities and the sea conversion of "mature" products.

Drewry cited a recent study commissioned by the International Air Transport Association that confirmed the above factors have combined to lower air cargo volumes by as much as 15 million tons since the turn of the century. The report said the modal shift to ocean container shipping accounts for about one-third of that downturn.

The shift towards cheaper ocean freight has gained popularity in recent years as shippers developed high tech IT systems and stringent inventory strategies. The researchers note there is also more confidence in container service reliability, which is somewhat misplaced since barely 60 percent of containerships arrived at their destinations on time during the third quarter.

Average transit times from Asia to the U.S. East Coast are 15 days longer than to the West Coast. Along with having to deal with longer lead times, Container Insight says Asia-USEC spot freight rates have increased since there is no resolution in sight for West Coast port labor contract talks.

Data from the World Container Index shows that the USEC rate premium over USWC services has grown from about $1,500 per-FEU in June to around $2,100 per-FEU by the end of November.

Drewry says airfreight rates will continue to rise in November as the shopping season hits its stride. The backlog at U.S. West Coast ports may lessen the traditional drop in Asia-to-U.S. rates in December, and depending on how long the issue remains unresolved, could keep air rates up through until Chinese New Year.

In conclusion, Drewry analysts note that congestion at U.S. West Coast ports is a costly reminder to shippers of the need for risk planning during peak seasons. They predict it will temporarily inflate air rates and demand, but won't reverse the longer-term trend towards ocean shipping.

IMO to implement mandatory container weighing in 2016

The International Maritime Organization will make it mandatory to weigh loaded containers before they are shipped by sea, effective June 1, 2016, according to the minutes of the organization's Maritime Safety Committee.

In order to maintain adequate safety, the committee has deemed that cargo-filled containers can't be loaded on a ship until their weight has been determined. The verified weight can be determined in two ways — either by weighing the loaded container at an approved weighing station or by weighing the individual items to be shipped in the container, and add that to the container's net weight.

Since the freight rate depends on the weight, there has reportedly been pushback against the IMO's new amendment. But since incorrect information might result in overloaded, super-sized ships that cause container stacks to collapse, containers to fall overboard and more frequent ship accidents, safety has won out.

U.S. oil shipments to Asia founder as Middle East producers flood market

Middle East OPEC producers are exploiting the lowest oil prices in five years to defend their market share against the U.S. shale oil boom, as U.S. oil shipments to Asia grind to halt.

Asian refineries have stopped imports of U.S. condensate only four months after they started, reportedly favoring cheaper Middle East grades, according to trade and industry sources.

The issue demonstrates the fierce competition that has arisen between suppliers after oil prices dropped more than 40 percent since June.

Last week Ali al-Naimi, the oil minister of OPEC Saudi Arabia, told fellow OPEC members they had to fight the U.S. shale boom. He argued against cutting OPEC production in order to keep prices low and undermine the profitability of North American shale oil, which is costly to produce.

"There's so much oversupply that Middle East crudes are now trading at discounts and it is not economical to bring over crudes from the U.S. anymore," said Tushar Tarun Bansal of consultancy FGE in Singapore.

U.S. oil became uncompetitive against like grades from Qatar, Saudi Arabia and the UAE after Gulf producers began dropping prices in August.

For more of the Reuters story:

Alabama Port Authority to build $20M intermodal yard at Mobile port

The Alabama State Port Authority is awarding a $20.1 million contract for design and construction of a new intermodal facility to Illinois-based R.T. Milord Company this week.

The Garrows Bend Intermodal Container Terminal would increase the ability of the Port of Mobile's to move containerized cargo between rail cars and ships, and connects its container terminal to the national rail system. The project will add about 20 acres of new railyard.

Its operation would service APM Terminals Mobile and U.S. manufacturers shipping and receiving cargoes, Port Authority officials say.

R.T. Milord, which has built a number railroad and intermodal facilities in Charlotte, N.C., Fort Lauderdale, Fla. and Chicago, will oversee laying several thousand feet of new railroad track throughout the facility, connecting it to five of the naiton's Class I railroad companies.

For more of the story:

Hundreds of refugees arrive in Greek coastal town in crippled freighter

Almost 600 refugees have been temporarily housed in a basketball arena in the town of Ierapetra, Greece, after arriving in a crippled smuggling ship after more than a week at sea.

Red Cross volunteers delivered warm meals and clothing to the 80 children, 150 women and 361 men who were on the 250-foot Baris freighter, which was towed to Ierapetra Thursday, two days after losing engine power off Crete.

About two-thirds of the migrants are Syrians and qualify for refugee status, while the others include Kurds, Afghans and Palestinians, officials said.

"These are lower to middle class people who were seeking a better life, due to the war in their country," said Argyris Pantazis, Ierapetra's deputy mayor for civil protection.

For more of The Republic story:


Wednesday, December 3, 2014

Slowdowns continue as ILWU-PMA contract talks resume

As main table negotiations between the International Longshore Workers Union and the Pacific Maritime Association resumed Tuesday after a 12-day break, productivity at the Port of Tacoma was still down, according to a port official.

Port of Tacoma spokeswoman Tara Mattina said the slower pace of loading and unloading container ships continued Monday with only a slight improvement.

West Coast union dockworkers have been working without a contract since July 1, and the ILWU and the PMA have been in talks to negotiate a new contract since May. Slowdowns at major West Coast ports, including Tacoma, Seattle, Los Angeles and Long Beach, reportedly began around Oct. 31.

The PMA has accused union members of deliberately cutting productivity at the end of the holiday season as a tactic to get an edge in contract negotiations.

The union says that employers are unfairly scapegoating the longshore workers as the source of lowered productivity. ILWU spokesman Craig Merrilees said container handling worldwide has faced major problems due to larger ships being unloaded at terminals not designed for their huge capacity, a shortage of truck chassis, and a lack of drivers to haul containers to their final destinations.

Retailers and manufacturers, along with fruit, potato and Christmas tree growers have complained that the lack of timely shipping is ruining their bottom lines.

Merrilees said that progress has been made at the subcommittee level of negotiations during the recess from main table negotiations. The results of that more focused negotiation process will likely soon migrate to the larger talks for further discuss and possible agreement, he said.

For more of the News Tribune story:

Biggest ILA local in Baltimore placed under trusteeship

On Monday the biggest local dockworker union in Baltimore was placed under temporary trusteeship by the national union office, according to Jim McNamara, a spokesman for the International Longshoremen's Association.

The action occurred after a year of infighting and accusations that local union officials have mismanaged the union's finances and stacked membership rolls in their favor.

Some think the intervention will help resolve a long-standing local contract standoff between the International Longshoremen's Association Local 333 and port employers.

That conflict has weakened shippers' confidence in Baltimore's port workforce, triggering some rerouting of cargo to other cities.

McNamara said an appointed trustee, likely an ILA Executive Council member, would take control of the Local 333’s operations early this week and hold a hearing open to Local 333 members in Baltimore on Thursday. He wouldn’t talk about why appointing a trustee was necessary.

Labor expert Philip Dine said the purpose of trusteeships vary from addressing "out-and-out corruption" to streamlining financial practices or making sure that a local is observing bylaws.

The port conflict stems from a three-day strike in October 2013, when members of Local 333 walked out over contract issues, demanding more power to assign jobs on the docks, among other rights. A federal mediator ruled that the strike violated the master contract and ordered Local 333 to pay shipping companies about $3.9 million in damages.

That award complicated the local contract negotiations and is now the subject of litigation between Local 333 and shipping representatives, including the Steamship Trade Association of Baltimore and the United States Maritime Alliance.

For more of the Baltimore Sun story:

Evergreen expands Asia-East Africa service

In order to better serve the Asia-East Africa trade, Evergreen Line announced it would adjust its existing AEF joint service and also enter into a slot exchange agreement with CMA CGM and Emirates Shipping Line on their ASEA service. Both actions will go into effect in December.

Evergreen says the agreement will double Evergreen's sailing frequency on the Asia - East Africa trade to twice weekly, with one trip calling Mombasa (Kenya) and the other Dar es Salaam (Tanzania).

The new AEF route will start with its Singapore sailing on December 6, according to the statement. The fleet will consist of five vessels of 2,500 - 2,800 TEUs (three contributed by Evergreen, one by COSCO and the other by X-Press Feeders).

The AEF port rotation will be: Port Klang - Tanjung Pelepas - Singapore - Colombo - Mombasa - Port Klang.

Evergreen said the ASEA route would be launched with its Singapore sailing on December 9. The fleet is comprised of six vessels of between 2,500 and 2,800 TEUs (four provided by CMA CGM and two by Emirates Shipping Line).

The ASEA port rotation will be: Singapore - Tanjung Pelepas - Port Klang - Colombo - Dar Es Salaam – Singapore.

Russian Railways Logistics joins Russian-Chinese multimodal project

Russian Railways Logistics has become a partner in a new international Russian-Chinese multimodal logistics project, according to a company statement.

Pavel Sokolov, CEO of Russian Railways Logistics, inked a strategic cooperation deal with Zhao Wenmin, CEO of Zhengzhou International Land Port Development and Construction Co., on the organization of a container train service from Zhengzhou, China to Europe.

The parties agreed to actively develop Zhengzhou-to-Moscow and Zhengzhou-to-Europe freight train routes through Russia, using the existing terminal network, the statement said. The possibility of launching a logistics hub in Moscow has also been discussed.

Within the development of the China-to-Europe route, Russian Railways Logistics said it would cooperate with YuXinOu (Chongqing, China), along with DB Schenker, "Kaztransservice," CRIMT and Chongqing transport holding company.

35 pounds of cocaine found in container at Port Newark

When inspecting a ship in October, customs agents at Port Newark found a black duffle bag containing more than 35 pounds of cocaine sitting inside a container.

The container, which was supposed to be carrying wine and cheese, came from Australia and was discharged in Cristobal, Panama, according to a statement from U.S. Customs and Border Protection.

The drugs were turned over to Homeland Security agents.

For more of the CBS Local story:


Thursday, December 4, 2014

Hapag-Lloyd/CSAV merger creates the world’s 4th largest container carrier

This week Hapag-Lloyd cleared the last outstanding regulatory hurdle for its merger with Chilean shipping line Compania Sud Americana de Vapores, making way for the creation of the world's fourth largest container line, according to a company statement.

The company hopes the consolidation will ease the pressure on freight rates, helping it to overcome the worst downturn on record.

The merger of Hapag-Lloyd and CSAV is expected to result in annual savings of at least $300 million on network optimizations, improvements to productivity and reductions in costs, the statement said. The merged company will command a fleet of 200 vessels with a total capacity of one million TEUs, transporting around 7.5 million TEUs annually.

With revenue of around $12 billion, the combined entity will take its place on the list of the top five global shipping companies.

"This is a big day for both companies," said Rolf Habben Jansen, Hapag-Lloyd CEO. "With Hapag-Lloyd’s strength in Asian traffic and on the North Atlantic, combined with CSAV’s strong position in Latin America, we will become the leading shipping company in this region – and thereby be able to offer our global customers an even more attractive network and wider range of products."

The German shipping line said it also has plans to raise $459 million by the end of the year, from which CSAV will take a share of $318 million and Kühne Maritime $136 million.

The main processes of integrating CSAV’s container business into Hapag-Lloyd will likely completed by the end of the second quarter of 2015, according to the press release.

For more of the Businessweek story:

FMC officially approves Seattle-Tacoma Seaport Alliance

On Monday the Federal Maritime Commission approved an “interlocal agreement” submitted in October by the ports of Seattle and Tacoma, clearing the way for the ports to begin technical negotiations to create a Seaport Alliance.

The ports plan to submit a agreement to the agency by the end of March 2015 outlining details of the alliance, which is meant to give the Washington state harbors stronger pricing and negotiating power with ocean carriers and terminal operators.

The agreement will provide "a framework to examine business objectives, strategic marine terminal investments, financial returns, performance metrics, organizational structure, communications and public engagement," according to a joint release from the ports.

The alliance may give the ports more pull with state and federal governments, helping them win funding for SR 167 and SR 509, two key Puget Sound freight routes that remain unfunded and incomplete.

For more of the Puget Sound Business Journal story:

CMA CGM: Further shipping industry consolidation lies ahead

The cost of giant new container ships and the fierce competition to fill them has triggered a bout of consolidation in the shipping industry that is likely to continue, according to an executive at French shipping giant CMA CGM.

Earlier this year, CMA CGM teamed up with China Shipping Container Lines Co. and United Arab Shipping Co. to share vessels and port facilities on some of the world’s largest trades. The Ocean Three alliance was formed after Maersk Line and MSC—the planet’s two biggest container-shipping companies—announced a similar cooperative agreement in July.

"On the main trades between Asia and Europe (and) Asia and the U.S., there will be more consolidation, as these loops will increasingly be serviced by very large vessels that can carry up to 20,000 containers," said CMA CGM Group Executive Officer Farid Salem. "It isn’t easy for a smaller operator to either buy or fill such ships." Triple E ships carry up to 20,000 containers and cost more than $160 million.

Container shipping, which carries around 95% of the globe’s manufactured goods, has suffered for the past decade from overcapacity, which has led to falling freight rates.

"There will be excess capacity overall (in the short term) and this could mitigate any extra trade volumes, so we will continue to play yo-yo with the freight rates. We don’t see a clear recovery in rates next year," said Salem, CMA-CGM’s third most-senior executive. "In the past, (down) cycles used to last three years, but now it is more like five years."

Salem said the company would take delivery of six 18,000-TEU ships in 2015 and deploy them on the Asia-to-Europe trade route as part of the Ocean Three Alliance.

Last week, CMA CGM bought Germany’s Oldenburg-Portugiesische Dampfschiffs-Rhederei GmbH, a short-sea operator that will feed cargo into its super-sized vessels.

For more of the Wall Street Journal story:

Port of Portland director sets retirement date

Bill Wyatt, longtime Port of Portland executive director, has set a target for his retirement of between three to five years.

Wyatt, who has held the position for 14 years, said he has served two generations of port commissioners and is on his third batch of senior staffers.

In a meeting with the Portland Business Journal, the port leader said he plans to retire after his 67th birthday, which is in two years.

For more of the Portland Business Journal story:

13 young Syrian and Afghani migrants found in container

Thirteen young Syrian and Afghani migrants have been found in a tanker containing plastic granules at the Port of Dover in England.

Border Force, immigration enforcement officers and Kent Fire and Rescue were called to the Eastern Docks Tuesday afternoon.

The 13 migrants—11 from Syria and two from Afghanistan—will be interviewed by Kent Social Services, who will determine their ages. 

For more of the Seven Oaks Chronicle story:


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