Monday, December 9, 2013
WTO member nations reach first ever trade reform deal
On Saturday, the World Trade Organization reached its first ever trade reform agreement to a cheer of approval from 159 ministers who had gathered in Bali to decide on the deal that could add $1 trillion to the global economy. It was the first multilateral agreement negotiated by the WTO's 159 member nations in its 18-year history.
The draft included provisions to cut red tape at borders, a step sought by shippers including FedEx Corp. and United Parcel Service Inc.
The approval came after the U.S. and India compromised on food subsidies and a Latin American bloc led by Cuba dropped its Cuba dropped a last minute threat to veto the trade deal measures.
"For the first time in our history, the WTO has truly delivered," WTO Director-General Roberto Azevedo told those assembled, after the talks had extended into an extra day.
"This time the entire membership came together. We have put the 'world' back in World Trade Organization," he said. "We're back in business...Bali is just the beginning."
The agreement lets India and other developing nations continue to subsidize their crops to bolster food security without having to worry about legal challenges, so long as the practice doesn't distort trade, according to a draft copy of the deal's text.
The U.S. and other WTO members would retain the right to file a complaint if subsidized goods are sold in global markets and depress prices or impede competition.
"The WTO's Bali agreement represents the rejuvenation of the multilateral trading system that supports millions of American jobs and offers a forum for the robust enforcement of America's trade rights," President Barack Obama said in a statement.
MARAD: Panama Canal expansion will boost U.S. exports over time
The Department of Transportation's Maritime Administration released a study on likely U.S. shipping patterns and industry costs after the Panama Canal expansion that finds that U.S. exports will improve over time, according to a MARAD statement.
The Panama Canal Expansion Study, the first of a two-part study, MARAD found the more cost-effective service generated by the bigger Post-Panamax ships could improve the ability of some U.S. exports, like grain, coal, petroleum products and liquefied natural gas, to compete in global markets. In addition, the report noted that shifts in shipping patterns impacting the national transportation system would happen slowly and over time.
The study found the integration of Post-Panamax vessels into U.S. trade lanes will have substantial implications for the nation's shippers, shipping companies, ports and surface freight corridors, particularly along the East Coast, Gulf Coast and inland states located east of the Mississippi River.
"Preparation is the key, and we're already seeing it," said Acting Maritime Administrator Paul "Chip" Jaenichen. "Increased cargo means expanded capacity, and forward-looking ports are deepening their harbors and improving their intermodal connections, often with the help of the Obama Administration's programs, such as the competitive TIGER (Transportation Investment Generating Economic Recovery) Grant program."
Since 2009, the Obama Administration has directly invested more than $400 million in infrastructure projects at 33 U.S. ports in 22 different states through the TIGER program alone, all to improve the condition, efficiency and capacity of the nation's ports, including roads, rail and channels.
To date, MARAD said the White House has expedited seven infrastructure projects to help modernize and expand five major U.S. ports that will be directed impacted by the canal completion, including the Port of Jacksonville, the Port of Miami, the Port of Savannah, the Port of New York and New Jersey and the Port of Charleston.
China exports and trade surplus up
China's exports bested forecasts in November, pushing its trade surplus to the highest level in more than four years in a sign that the second largest global economy is stabilizing.
Foreign shipments rose 12.7 percent year-over-year, according to the General Administration of Customs, exceeding estimates from 41 of 42 analysts polled by Bloomberg News. The trade surplus of $33.8 billion was the largest since January 2009, while imports increased by 5.3 percent, falling short of a median projection of 7 percent.
The export data reflects pickups in shipments to the U.S., Europe and South Korea, according to customs data.
Stronger demand from overseas may give Premier Li Keqiang the chance to implement reforms that increase the role of markets in the economy while helping meet the 7.2 percent annual growth pace he says is needed to ensure stable employment.
For more of the Bloomberg story: businessweek.com
United Nations ranks shipping lines
On Friday, the United Nations Conference on Trade and Development released its "Review of Maritime Transport 2013," which ranked global shipping lines based on the volume of shipping containers owned and its market share.
Denmark's Maersk Line, which operates a fleet of 453 vessels, ranked as the largest shipper in the world with 2.15 million TEUs, or 13.4 percent of the global market as of January 2013, UNCTAD said.
Switzerland's Mediterranean Shipping, which owns 398 vessels, came in second with 2.06 million TEUs, or 12.9 percent of the world's total, the U.N. organization said.
CMA CGM Group of France ranked third with 1.15 million TEUs, accounting for 7.2 percent of the global total, ahead of China's COSCO Group, which owned 715,219 TEUs in containers, or 4.5 percent of the world's total, it said.
Taiwan-based Evergreen Marine Corp. ranks as the fifth largest shipping company globally, with 187 vessels and 709,702 TEUs, accounting for 4.4 percent of the global total of 16.06 million TEUs.
China's container port throughput of 155.02 million TEUs ranked first globally, followed by Singapore (32.42 million TEUs), Hong Kong (23.10 million TEUs), South Korea (21.45 million TEUs), Malaysia (20.87 million TEUs), and the United Arab Emirates (17.21 million TEUs).
Global port throughput in 2012 grew about 3.8 percent year-over-year to 602 million TEUs, UNCTAD said.
For more of the China Post story: chinapost.com.tw
U.S. regulator delays P3 Alliance approval
The U.S. Federal Maritime Commission pushed back a decision on whether to give the word's three-biggest container-shipping companies approval to form an alliance that would control a 40 percent market share of some of the world's busiest trade lanes.
The FMC said that one of it commissioners raised questions about the P3 Alliance partnership between Maersk Line, Mediterranean Shipping Co. and CMA CGM before Friday's deadline for concerns to be submitted.
Beneficial cargo owners, including global importers and exporters, have been lobbying against the P3 over concern they will lose any input in setting freight rates. Smaller shipping companies worry that they may be forced out of business.
For more of the Wall Street Journal story: online.wsj.com
Tuesday, December 10, 2013
NRF: 2013 U.S. retail imports up 2.3 percent
Major U.S. retail container ports are expected to grow container volume by 1.8 percent in December and by 2.3 percent for 2013 compared to 2012, according to the latest Global Port Tracker report released by the National Retail Federation and Hackett Associates.
"Imports have seen good growth over last year and retailers are well-stocked as the holiday season continues," said Jonathan Gold, vice president for supply chain and customs policy. "Holiday merchandise has made it from the ships to the shelves and the rest is up to the shoppers."
The NRF forecasts that 2013's holiday sales will grow 3.9 percent year-over-year to $602.1 billion.
The 4.35 million containers handled during the peak months of August, September and October represented a 4.3 percent year-over-year increase and accounted for 26.8 percent of all retail imports for the year.
The ports followed by Global Port Tracker handled 1.43 million TEUs in October, up 6.4 percent from October 2012. November cargo volume was predicted to be up 3.6 percent at 1.33 million TEUs, December up 1.8 percent at 1.31 million TEUs, January 2014 up 3.3 percent year-over-year at 1.35 million TEUs, February down 7.8 percent at 1.18 million TEUs, March up 15.9 percent at 1.32 million TEUs, and April up 6.6 percent at 1.38 million TEUs.
The total for 2013 is forecast at 16.2 million TEU, up 2.3 percent from 2012's 15.8 million TEU.
"The U.S. economy appears to have found a growth spurt," Hackett Associates Founder Ben Hackett said, citing estimated third-quarter gross domestic product growth of 3.6 percent. "The paradox is that consumer spending remains very cautious and does not come anywhere near the expansion of GDP.
"The reason is the increasing levels of inventory. Despite back-to-school sales, Black Friday, Cyber Monday and regular sales, the inventory-to-sales ratio remains stubbornly high. Hopefully, November and December numbers will show a catch-up that will help reduce the inventories."
Global Port Tracker covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami, and Houston.
Hapag-Lloyd looks for partnerships to boost market share
German shipping firm Hapag-Lloyd is in merger talks with Chile's Vapores, and may pursue deals with other rivals as it aims to compete with Maersk Line, MSC and CMA CGM, according to its chief executive Michael Behrendt,.
"The aim should be to create something bigger by merging several companies," Behrendt said to Reuters. "It is my goal that we can catch up with the top three. I may not be able to achieve this during my time, but perhaps make a step in that direction."
Hapag-Lloyd, ranked as the world's fifth largest container carrier by capacity, announced last week it was in talks to merge with Chilean shipper Compania Sud Americana de Vapores.
Along with the rest of the industry, the company is contending with the worst shipping slump on record, with a weak global economy, vessel overcapacity and low freight rates making consolidation an attractive prospect.
It is not the first time Hapag-Lloyd, with $3.22 billion of net debt and a nine-month net loss of 56 million euros, has tried to expand through large mergers. Last year it held talks with German peer Hamburg-Sud, but the parties were unable to agree terms. Six years ago a potential merger with Singapore's Neptune Orient Lines fell through over which company would hold the majority stake.
Behrendt said that the company, in which German travel and tourism group TUI AG owns a 22 percent stake, is ready to launch an initial public offering when market conditions improve.
For more of the Reuters story: in.reuters.com
China to hand out shipbuilding subsidies
China is providing new subsidies for buying ships to help its struggling shipbuilders, in a confusing move from a government that has made a commitment to reduce state support for sectors with overcapacity in order to bolster the economy.
The central government said it would set aside funds that give shippers subsidies of $247 per gross ton to replace old models with new, eco-friendlier vessels, according to a joint government statement by the Finance Ministry, the Transport Ministry, the Ministry of Industry and Information Technology, and the National Development and Reform Commission, a powerful economic planning agency.
The plan will run until the end of 2015 and the grants are only valid for ships scrapped one-to-10 years ahead of mandated retirement dates, the statement said.
Chinese shipbuilders are fighting weak demand and excess capacity. This new move indicates Beijing is willing to contradict itself to save a big industry that is also a big employer.
China's cement, steel and solar panel industries are also fighting overcapacity.
The new subsidies were first announced on Dec 5 but made public only on Monday on the government website.
For more of the Reuters story: reuters.com
UPS, FedEx hopes WTO deal will streamline trade regulations
United Parcel Service, FedEx, Boeing, and Caterpillar are among businesses hopeful that the Dec. 7 World Trade Organization agreement will establish common procedures and cut red tape that can leave perishable goods rotting on piers. The WTO says the deal may increase the global economy by $1 trillion.
Before a product can be imported into a country, shippers and shipping companies must comply with the regulations of that country, which often involves a morass of forms to satisfy the mandates of multiple government agencies.
"What's in place now is a pretty fragmented system where each country kind of makes its own rules, which leads to delays in transit," said Brandon Fried, executive director of the Airforwarders Association.
The WTO member nations unanimously agreed on measures to make customs rules more transparent, expedite the release of perishable goods at ports, promote the use of electronic payments and adopt common customs standards, according to a fact sheet from the U.S. Trade Representative's office.
FedEx regards the Bali deal as making "global trade simpler, more transparent and more predictable," said Michael Ducker, chief operating officer of FedEx Express, in a statement.
The deal will expedite customs procedures by allowing for pre-clearance before goods arrive at ports, Michelle Wein, a research analyst at the Information Technology and Innovation Foundation.
"The major beneficiaries of the Bali deal are the developing countries," particularly in sub-Saharan Africa, Wein said. "It's really aimed at integrating them into global supply chains."
The WTO's general council still needs to adopt the agreement, which may not happen until July.
For more of the Bloomberg story: businessweek.com
Feds throw book at Port Everglades cocaine smugglers
Two South Florida men were sentenced to federal prison time for their roles in a cocaine smuggling ring that used shipping containers.
U.S. District Judge K. Michael Moore sentenced 47-year-old David Rodriguez of Miami to more than 19 years behind bars. Moore sentenced 35-year-old Rogny Jerez Lopez of Hialeah to more than seven years in prison.
Prosecutors say Rodriguez was the leader of a drug cartel that smuggled millions of dollars in cocaine in cargo containers. Court documents say Jerez Lopez was a former employee at Port Everglades near Fort Lauderdale who helped extract the drugs once in port.
For more of the Ocala Star Banner story: ocala.com
Wednesday, December 11, 2013
ISM survey: Sales will be stronger for U.S. manufacturers in 2014
A poll of U.S. manufacturing purchasing managers projects a 4.4 percent boost in sales in 2014, according to a survey by the Institute for Supply Management.
"Manufacturing purchasing and supply executives expect to see continued growth in 2014," Bradley Holcomb, chairman of the group's factory committee, said in a statement. "They are optimistic about their overall business prospects for the first half of 2014, and are even more optimistic about the second half."
For non-manufacturing industries, revenue rose 4 percent this year, stronger than the 3.5 percent projection in April. Service industries predict a 3.6 percent increase in sales next year.
Manufacturers also saw forecast an increase in personnel, predicting a 2.4 percent increase by the end of 2014, while service providers predicted employment will climb 2.1 percent.
"As confidence boosts, so does the ability and the appetite for adding labor," Anthony Nieves, chairman of the group's non-manufacturing committee, said on a conference call with reporters. "Companies have been doing more with less for quite some time."
In early December, the ISM reported that manufacturing unexpectedly grew in November at the fastest pace in more than two years, as export orders climbed on the global economic recovery.
For more of the Bloomberg story: bloomberg.com
Trans-Pacific Partnership talks extended to 2014
The 12-nation Trans-Pacific Partnership talks, expected to be finalized by the end of this year, will be pushed to 2014.
Negotiators made "substantial progress towards completing the Trans-Pacific Partnership agreement" and "identified 'potential landing zones' for the majority of key outstanding issues," according a statement from the Office of the U.S. Trade Representative, but ultimately, additional work is required.
Earlier this week, confidential draft TPP documents that were released on WikiLeaks, indicating that the U.S. and other TPP nations are divided over intellectual property proposals sought by the U.S.
The agreement between Australia, the U.S., Canada, Japan, Mexico, Peru, Vietnam, Malaysia, Brunei Darussalam, Chile, New Zealand, and Singapore may include other countries in the future.
For more of the ZDnet story: zdnet.com
Port of L.A. renews long-term terminal lease with WWL auto shipping
The Port of Los Angeles has renewed its long-term lease with WWL Vehicle Services Americas, which operates a 91-acre auto terminal that processes approximately 200,000 vehicles annually, according to a port statement.
The 10-year agreement provides for a five-year extension, an option that would allow the subsidiary of Wallenius Wilhelmsen Logistics to operate the auto terminal through Jan. 1, 2027.
The Los Angeles Board of Harbor Commissioners approved the new lease in November.
"WWL has been an important source of jobs and revenue at the Port for years,'' said Port Interim Executive Director Gary Lee Moore. "WWL is a unique facility at the Port and we're extremely pleased to extend our relationship."
The WWL terminal specializes in receiving new cars shipped from overseas and preparing them for distribution and sale throughout the U.S. Located at Berths 195-200A, the terminal also exports restored and vintage cars.
During peak operations, the WWL terminal employs 250 union workers over three shifts. International Longshore and Warehouse Union workers drive all vehicles on and off the ships.
Ports of L.A.-Long Beach implement program to speed up trucks
A project that aims to streamline truck traffic and efficiency at the ports of Los Angeles and Long Beach, the Freight Advanced Traveler Information Program Demonstration Project, launches on Wednesday, according to a statement.
This public-private effort, funded by the U.S. DOT Research and Innovative Technology Administration, will be tested for the next six months.
By improving the information flow between truck fleets and port terminals, the goal is to reduce traffic congestion during peak hours.
Real-time information will allow drivers and schedulers to reroute and reschedule according to current conditions in the port and on freeways and arterial highways.
The Demonstration Project partners include The Harbor Trucking Association, Port Logistics Group, and Yusen Terminals.
The DOT will publish the results of the project after six months.
Civil War-era ship found at bottom of Lake Huron
A shipwreck hunter discovered a Civil War-era ship lost in the Great Lakes for more than 150 years.
David Trotter, 72, announced Monday that his crew had finally found the Keystone State, a wooden steamer that went down with 33 passengers in a storm in Nov. 1861, after 20 years of searching.
He said the ship was lying at the bottom of Lake Huron, near Alpena.
"When you virtually have thought that you would never find something you were looking for, and finally it comes up and you find it, you say, 'Wow,'" he told My Fox Detroit.
Trotter revealed that mystery still surrounds the exact circumstances in which the vessel, called a "palace steamer" due to its ornate and comfortable design, went down.
Its final journey was seen as "strange" as it left Detroit for Milwaukee in freezing cold November to haul farm equipment, but there is a rumor it was actually carrying a secret Civil War shipment.
For more of the Daily News story nydailynews.com
Thursday, December 12, 2013
Home Depot profits up on U.S. housing boom
Retail giant Home Depot announced this week that it would meet its profit goal one year ahead of schedule, as rising housing prices prompt a surge in renovations.
In June 2012, the company announced a long-term operating margin target of 12 percent and goal of creating 24 percent return of invested capital by the end of its 2015 fiscal year. The retailer now says it expects to reach those targets by the end of the 2014 fiscal year.
"We have set out a challenging new goal for 2015 and plan to continue to build on our company's foundation of customer service, product authority and value creation," said Frank Blake, Home Depot chairman and chief executive.
Home Depot now projects an operating margin of 13 percent by the end of 2015 with a return on invested capital of 27 percent. It also expects share repurchases of about $5 billion and capital spending of $1.5 billion in the period.
The company reported nearly $75 billion in sales for the fiscal year ended in February.
"They have done a tremendous job with margins as the housing market has picked up," Michael Souers, an analyst for Standard and Poor's in New York. "After several years of neglect, homeowners are reinvesting in their homes."
Home Depot shares were up about 1% in morning trading on Wall Street.
For more of the Bloomberg story: businessweek.com
Fiscal growth up at Georgia ports on new customers, rebounding economy
In November the Georgia Ports Authority reported fiscal-year-to-date growth of more than 5 percent due to a combination of new customers and a rebounding U.S. economy, according to GPA executive director Curtis Foltz.
Container volume was up 6.6 percent for the month of November, with a 7.3 percent rise in total tonnage across all terminals, according to a GPA statement.
The GPA moved more than 1.3 million TEUs during the first five months of the fiscal year, a 5.5 percent year-over-year increase. In total cargo, the port said it has moved more than 12 million tons through the end of November, a nearly 9 percent increase over fiscal year 2012 year-to-date.
New customers calling at Georgia's ports include appliance manufacturer Haier America Trading and expanded vehicle exports, especially Toyotas and Nissans. The Port of Savannah has also received private investment in refrigerated cargo warehousing that will help sustain Georgia's substantial poultry exports.
The GPA says it is on track to handle more than 3 million TEUs in FY 2014.
Russia courts U.S. trade agreement
Russia wants to increase trade with the U.S. with a comprehensive deal on a number of trade-related issues, including investments and regulations, according to a Russian government official.
A bilateral investment treaty could be crafted within the next year, and deals on regulations and standards could be completed within five years, the official said to journalists in Washington, asking to remain anonymous since the talks are preliminary.
Negotiations may recommence at the World Economic Forum meeting in Switzerland in early 2014, the source said, adding that Russia isn't ready to consider joining the Trans-Pacific Partnership agreement that the U.S. is now brokering with 11 regional nations.
This proposal from Russian government officials comes during a time of rocky relations with the U.S., although the two nations have joined forces to facilitate deals to eliminate Syria's chemical weapons and broker a nuclear agreement with Iran. The countries have conflicted over political unrest in Ukraine and Russia's protection of Edward Snowden, the former National Security Agency contractor who acknowledged leaking classified U.S. Documents.
"One of the reasons that the relationship between the two countries is so volatile is because there's a very limited amount of economic ties" between them, Jeff Mankoff, deputy director of the Russia and Eurasia program at the Center for Strategic & International Studies in Washington, said in a phone interview.
The total volume of U.S. trade in goods with Russia in 2012 was $40 billion, about 1 percent of total U.S. Trade.
Dole signs 15-year renewed lease with Port of Wilmington
Dole Food Company renewed its lease at the Port of Wilmington for the next 15 years in a move that will positively maintain hundreds of jobs and ensure a key revenue stream for Delaware's economy, according to a statement from the Delaware Economic Development Office.
The parties signed the deal at the governor's offices in Wilmington, the statement said. Gov. Jack Markell and Dole CEO and owner David H. Murdock were in attendance, as were Alan Levin, chairman of Diamond State Port Corporation and director of the Delaware Economic Development Office, and other government, company and union officials.
"The Port has been a vital hub of commerce in Delaware for nearly a century," said Gov. Markell. "Today it remains as important as ever thanks to customers like Dole, which connect our state to the global economy, provide jobs for hard-working Delawareans and ensure a dependable flow of revenue for our economy."
Retaining Dole's business was crucial not only to the port but also to the state of Delaware, according to the statement. The company's use of the port for its cargo operations will continue to support 850 jobs.
"We have been at the Port of Wilmington for more than 30 years and this agreement with the Diamond State Port Corporation reaffirms our commitment to the people of Delaware, the longshoremen, our employees, vendors and customers," said Stuart Jablon, Vice President and General Manager of Operations for Dole Fresh Fruit.
Jablon said Dole was the first containerized banana company importing at Wilmington, now the largest fresh fruit import port in North America.
Diana Shipping fined $1.1M for pollution violations
A U.S. District Court judge fined the owner of a Bahamian-flagged cargo vessel, the Thetis, $1.1 million for numerous pollution-control violations.
Diana Shipping Services, the Panamanian company that owns and operates the vessel, was also placed on probation for three and a half years Thursday. A court-appointed monitor will keep an eye on the company's business practices.
Ship engineers Ioannis Prokakis and Antonios Boumpoutelos received one year of probation. They and the company were convicted in August of conspiracy, failing to properly maintain an oil-record book and falsifying records.
Judge Mark S. Davis ruled that the Thetis crew discharged oily bilge waste directly into the sea using a device commonly referred to as a "magic pipe" that bypasses environmental controls mandated by both international and U.S. law.
For more of the Virginia-Pilot story: hamptonroads.com