Today's Cargo News Archives
Summary for December 8 - December 12, 2008:
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Monday, December 8, 2008

Retail box traffic falls for 16th straight month

The monthly Port Tracker report released Dec. 5 by the National Retail Federation and IHS Global Insight shows that year-over-year cargo volume at the nation’s major retail container ports fell for the 16th straight month in November, leaving 2008 on track to be the slowest year since 2004.

Volume is projected to total 15.3 million TEUs for the year, compared with 16.5 million TEUs in 2007, for a decline of 7.1% and the lowest total since 2004, when 14 million TEUs moved through the ports.

“As retailers face the most challenging holiday season in years, they are being careful with their inventory levels, and that means lower volume at the ports,” said Jonathan Gold, NRF vice president for supply chain and customs policy.

“Cargo volume isn’t a direct correlation with dollar volume of sales, but it’s a good indication of what retailers are thinking,” Gold said.

U.S. ports surveyed handled 1.36 million TEUs in October, the most recent month for which actual numbers are available.

December is forecast at 1.22 million TEUs, down 5% from December 2007. January 2009 is forecast at 1.17 million TEUs, down 4.9 % from a year earlier, and February is forecast at 1.11 million TEUs, down 9%.


Port Tracker


FedEx Freight/National LTL to increase rates

FedEx Freight and FedEx National LTL Dec. 5 announced that they will implement a 5.7% general rate increase effective Jan. 5, 2009.

Rates for other operating companies within FedEx Corp., specifically FedEx Express and FedEx Ground, are not affected, according to the announcement.

The rate increase will apply to interstate and intrastate traffic, as well as to certain shipments between the U.S. and Canada and Mexico. Various additional adjustments will include minimum and accessorial charges, as well as adjustments in select lanes and service areas, FedEx said.

“At both FedEx LTL companies, we are committed to supporting our customers’ supply chains by investing in key elements of infrastructure,” said Dennie Carey, senior vice president of marketing, FedEx Freight.

FedEx National LTL is operating in expanded facilities in San Bernardino, Calif., Phoenix, Ariz., Decatur, Ala., and Rock Island, Ill. The company is also transitioning from non-decking trailers to units with decking, which reduces the potential for damage to freight.

The new base rate and rules tariffs for FedEx Freight and FedEx National LTL will be available on the FedEx website after Jan 5.




Panama Canal receives bids for 3rd excavation

Moving forward with the selection process for the third of four dry excavation contracts under its Canal Expansion Program, the Panama Canal Authority (ACP) Dec. 4 announced that it has officially received a total of six bids.

Similar to the first and second dry excavation projects, this contract will be awarded to the firm with the lowest-priced bid that meets all of the requirements stated in the request for proposals, canal authorities said.

The ACP will review the documents submitted by the lowest bidder to verify the company’s experience, technical capacity, financial strength, and bonding before awarding the contract. A winner will be determined later this month for this next phase of the project.

The scope of work included in the contract encompasses the excavation, removal, and disposal of 8 million cubic meters of material, which will further reduce Paraíso (Paradise) Hill from 46 meters to 27.5 meters above sea level.

It also calls for the construction of approximately 2.5 kilometers of access and the clearing of 190 hectares of land bearing “munitions and explosives of consideration” (MEC), remnants from former U.S. military training in Panama.


Panama Canal Authority (ACP)


Tuesday, December 9, 2008

New Otay Mesa crossing in the works

Gov. Arnold Schwarzenegger Dec. 8 joined federal and state officials from the United States and Mexico to announce the issuance of a federal permit that clears the way to create a new California-Mexico border crossing in Otay Mesa.

“This is one more step in our continued effort to rebuild and expand the infrastructure needed to accommodate increased international trade with Mexico and other countries around the world,” said Schwarzenegger.

With the passage of Senate Bill 1486 earlier this year, the San Diego Association of Governments (SANDAG) can issue bonds and seek private investor dollars to build the SR 11 extension to the border as a toll road.

SANDAG will be the toll authority for this project, the governor’s office said, and the end result will provide a premium crossing option for a fee that is projected to reduce wait times from up to eight hours down to less than a half hour.

The schedule calls for issuing the toll revenue bonds in 2010, with this project projected to break ground in 2012 and open to traffic in 2014. 


Office of Gov. Arnold Schwarzenegger


NYK cuts fleet expansion plan

Shipping line Nippon Yusen Kaisha (NYK), Japan’s largest by sales, said it will still expand its fleet by the end of March 2011 but will cut the number originally planned.

NYK’s earlier plans to increase its fleet to 1,000 ships has been cut to 940 vessels, company spokesman Atsuto Kato told Bloomberg Dec. 9.

NYK said it has no plans to cancel existing orders but will mothball older ships ahead of schedule, sell other less profitable vessels, and cancel expensive chartering and leasing arrangements.

Yasumi Kudo, NYK executive vice president, told the Japanese news service that it is looking to boost NVOCC cargoes on NYK Logistics bills of lading that could be carried by third-party liner services.

“Instead of looking to our liner division’s profitability alone, we will prioritize extending comprehensive support to the logistics operations of our customers, who are the ultimate judges of our services, and endeavor to make a profit from those efforts,” Kudo said.


Nippon Yusen Kaisha (NYK)


UPS opens major hub in Shanghai

UPS, a global leader in supply chain and freight services, Dec. 9 announced the opening of a new international hub in Shanghai, improving access to China and speeding the movement of express packages and heavy freight around the world.

The facility is strategically located at the Pudong International Airport, in the heart of the Yangtze River Delta area, and becomes the key gateway linking China to UPS’s global network.

It features the largest on-site 24/7 customs inspection area in Shanghai and was built to a unique design that facilitates rapid handling of express packages in addition to heavy freight.

“Everything about this facility was built for speed and reliability,” said Dan Brutto, president of UPS International.

The hub features 117 conveyor belts and 47 docking bays and has a package sorting capacity of 17,000 pieces per hour. It also is designed, however, for simultaneous rapid processing of heavy freight, recognizing the different types of business done by importers and exporters in China, UPS said.

“China is UPS’s top international priority,” said Richard Loi, head of UPS China. “We have continued a steady path of expansion here, and this latest facility stands as a strong testament to our long-term commitment.”




Wednesday, December 10, 2008

Port of Seattle responds to fraud charges

Port of Seattle CEO Tay Yoshitani Dec. 9 announced the port’s response to a special investigation conducted by former U.S. Attorney Michael McKay whose report, released last week, listed 10 incidences of civil fraud in the port’s contracting procedures.

“Mr. McKay’s report reflects a ‘get it done at all costs’ culture — that day is over,” said Yoshitani. “We have tough competitors and big projects — but we have to deliver those projects with fair and open competition.”

Yoshitani took several disciplinary measures against staff members involved directly or indirectly in the situations identified by McKay. Two staff members have resigned, while other high-ranking officials were given suspensions without pay and letters of reprimand.

Yoshitani said the port will enforce a “robust compliance program” including implementing a newly strengthened whistleblower policy, standardizing project manual provisions used in major construction projects, and inserting an enforceable audit provision in all contracts that survives termination of the contract.

The port said it will continue efforts to ensure all procurement processes comport with port policy and state law.

A separate federal criminal investigation is still underway.


Port of Seattle


POLB expands Green Flag program

The Port of Long Beach Harbor Commissioners voted Dec. 8 to invest as much as $4 million a year to expand the successful Green Flag Incentive Program, which encourages ships that call at the port to slow down within 40 miles of the port.

Slowing down ships “reduces fuel consumption and cuts air pollution by hundreds of tons every year,” port authorities said.

“The Green Flag program has been a hit — it’s been well-received in the shipping community and has achieved major reductions in air pollution,” said Richard D. Steinke, Port of Long Beach executive director. “It’s the right time to expand the program for even greater air quality benefits.”

In the three-year-old Green Flag program, more than 90% of vessels near the port now voluntarily reduce their speed to 12 knots, reducing air pollution by more than 650 tons a year, in exchange for reduced dockage fees.

Expanding the reduced speed zone to 40 miles, with a dockage discount of 25%, could achieve air pollution reductions of more than 2,000 tons, port authorities said.


Port of Long Beach


JCPenney, Pacer take delivery of clean trucks

JCPenney Co. Inc. and PDS Trucking Inc., a subsidiary of Pacer Distributions Services, Dec. 9 announced that they have taken “a major step toward achieving their goal to convert 100% of the truck fleet handling JCPenney imports at the ports of Los Angeles and Long Beach to low-emissions, clean-diesel technology.”

The companies announced the delivery of more than 20 new Kenworth T-800 tractors that will replace aging diesel trucks currently in use by independent owner-operators in Pacer’s port network.

“This fleet conversion demonstrates that the private sector is capable of implementing sustainable, long-term solutions to port environmental issues that also preserve jobs and maintain the efficient flow of goods,” said Marie Lacertosa, senior vice president and director of logistics for JCPenney.

“Pacer will be taking delivery of up to 230 of these trucks by early 2009,” added Kent Prokop, president of PDS Trucking.

Independent owner-operators will begin using the trucks in early December to move containers of JCPenney merchandise out of the ports, where a substantial portion of the retailer’s apparel, home furnishings, footwear, and accessories arrive from the Asia-Pacific region.


JCPenney Co. Inc.

PDS Trucking Inc.


Thursday, December 11, 2008

Jaxport, Hanjin sign 30-year contract

Jacksonville Port Authority executives and representatives of the Hanjin Shipping Co. of Seoul, Korea, Dec 10 signed a 30-year lease agreement calling for construction of a 90-acre container facility at the Dames Point Marine Terminal in North Jacksonville, Fla.

The $300 million Hanjin Container Terminal at Dames Point is expected to open for business in late 2011 and will be a key hub operation for Hanjin’s East Coast port activity.

Following the permitting process, construction should take about 24 months, port authorities said.
The lease contains an option for further expansion.

The new terminal will be located adjacent to the nearly completed TraPac Container Terminal at Dames Point being built for Tokyo-based Mitsui OSK Lines (MOL). The TraPac Container Terminal will open for business in January 2009.

“This is the day we become a major player in Asian and European trade,” said Rick Ferrin, Jaxport’s executive director. “TraPac put us on the map, and Hanjin takes us to the next level.”

The new agreement is expected to create more than 5,600 new private sector jobs in Jacksonville and generate nearly $1 billion in annual economic impact.


Jacksonville Port Authority


Panama Canal signs $2.3 billion in loans

Culminating months of extensive negotiations, senior leaders of five multilateral and development agencies met with Panama Canal (ACP) officials Dec. 9 to sign an agreement for $2.3 billion in financing for the canal’s expansion.

The Japan Bank for International Cooperation pledged $800 million and the European Investment Bank $500. The rest of the package will be financed by the Inter-American Development Bank, the World Bank’s International Finance Corp., and Andean Development Corp.

“The geographic diversity of the offers and the high profiles of the institutions demonstrate the international market’s trust and confidence in the high-growth performance of the Panamanian economy and the successful management of the Panama Canal,” said Alberto Alemán Zubieta, ACP Administrator/CEO.

The $2.3 billion financing package will cover a portion of the $5.25 billion total cost of the project. The remaining amount for the project will be financed through canal-generated cash flow.

The project to widen the canal, the only waterway linking the Atlantic and Pacific oceans, is expected to be completed by 2014.


Panama Canal


Schneider launches South-Central service

Schneider National, the nation’s largest truckload carrier, Dec. 10 announced that it is extending its regional service to customers in the South-Central United States, increasing the company’s regional footprint to 16 states in less than a year since it first launched the offering.

The expansion includes the addition of 500 trucks and more drivers to the company’s regional fleet.

The new South-Central regional service will add nine states: Texas, Oklahoma, Kansas, Missouri, Arkansas, Louisiana, Tennessee, Mississippi, and Alabama.

Schneider first launched its regional service to Western U.S. customers in January 2008, providing service to a seven-state area including Arizona, California, Colorado, Nevada, Oregon, Utah, and Washington.

Schneider said regional terminals will be located in Dallas, Houston, and Memphis. The regional terminals will serve as hubs for customer service representatives and drivers who are dedicated solely to this region of the country.

Regional drivers develop regular driving routes, allowing them more time at home and consistent workloads.

Headquartered in Green Bay, Wis., Schneider National has provided transportation and logistics solutions for more than 70 years.


Schneider National


Friday, December 12, 2008

Lawsuit filed to halt Gulfport expansion

A lawsuit has been filed in federal court against the U.S. Dept. of Housing and Urban Development to stop Mississippi from diverting $570 million federal dollars intended for Hurricane Katrina housing recovery programs and instead applying it to restoring and expanding the Port of Gulfport.

The Mississippi State Conference NAACP, the Gulf Coast Fair Housing Center, and a number of residents filed the lawsuit Dec. 10, alleging that HUD should have done a more thorough review before approving the funds diversion.

Gov. Haley Barbour has said that expansion of the Port of Gulfport, the third busiest port in the Gulf of Mexico, is key to the region’s economic recovery.

The lawsuit contends that only 21 percent of $5.4 billion in federal hurricane recovery funds has been allocated to projects that benefit low- to moderate-income households.

HUD’s Community Block Grant Program, which provided most of the money, requires 50% of all spending to benefit such households.


Port of Gulfport


$30 million for Bayport construction

The Port Commission of the Port of Houston Authority will consider $30 million for Bayport Container Terminal construction contracts on Tuesday, Dec. 16.

The contracts include construction of a terminal administration building and a terminal maintenance and repair building, as well as an additional $5 million for the Houston Ship Channel and beneficial use sites.

Satterfield & Pontikes Construction is seeking approval for construction of the Bayport Terminal Administration Building for $10.6 million. The project is a two-story, 30,000-sq.-ft. building for operations, customs, and future tenants.

Satterfield & Pontikes is also seeking approval for construction of the Bayport Terminal Maintenance and Repair Building Phase 1 for $19.3 million. Required services include the facility construction of a 65,500-sq.-ft. building with maintenance offices, equipment repair bays, parts, and specified equipment storage.

Also scheduled for consideration is a contract to TCB Inc./Gahagan & Bryant Associates for engineering and design services, construction management services, project coordination team representation, geotechnical services, surveying marsh management, and other general assistance for the Houston Ship Channel and beneficial use sites for five years for $5 million.

Port of Houston Authority


Court challenge to port project denied

A Superior Court judge has denied a local labor union’s challenge to a major Port of San Diego project that includes the construction of two hotels on Lane Field, the former home of the Pacific Coast League San Diego Padres.

Superior Court Judge Ronald S. Prager recently denied Unite-Here Local 30’s claim that the port’s environmental review of the development was inadequate.

The development, proposed for a 5.8-acre parking lot at the foot of Broadway between Harbor Drive and Pacific Highway, would cost more than $400 million and include two hotels with parking for more than 1,300 vehicles.

The union, comprised of workers in the airport, gaming, and retail industries, filed the lawsuit after the San Diego Board of Port Commissioners approved a coastal development permit for the project in January 2008.

Before building can begin, however, the development must be approved by the California Coastal Commission, which will hold a hearing at its Jan. 8 meeting in the Oceanside City Council chambers to consider Unite-Here’s challenge of the project.




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