Documents filed on ABF Freight System’s “Legal Action” website show that discussions with Teamsters officials were often terse, and that Teamsters offered to help ABF acquire financially-troubled YRC — ABF’s primary competitor.
On Nov. 1, the management at Fort Smith-based Arkansas Best Corp. decided to seek up to $750 million in financial damages from alleged violations of a National Master Freight Agreement (NMFA) by the International Brotherhood of Teamsters and others.
Arkansas Best, which employs about 9,500 nationwide, posted a 2009 net income loss of $127.52 million, compared to a $29.168 million gain in 2008. However, the 2009 income loss includes a non-cash accounting charge of $64 million for the impairment of goodwill. Total revenue in 2009 was $1.472 billion, a 19.6% dip from 2008 revenue of $1.833 billion.
In August, Teamsters leader James Hoffa and Johnson said they were willing to help ABF acquire YRC. Their letter of Aug. 13 noted: “We are prepared to enter into discussions as soon as possible to address your interest in potentially acquiring YRCW.
The Teamster National Freight Industry Negotiating Committee has assembled a working group consisting of senior IBT officers, as well as certain financial restructuring advisors, pension experts and corporate and labor law counsel.”
ABF said it was not interested in acquiring YRC. On the Legal Action website, the company offers this explanation:
“In an effort to avoid filing the lawsuit and grievance, ABF attempted to negotiate industry-wide changes to the NMFA.
“TNFINC and its representatives responded by pressuring ABF to acquire YRC, indicating that in exchange for committing to an acquisition of YRC, that TNFINC would agree to contract changes which would make such a transaction economically viable.
“When we communicated our reluctance to pursue such a transaction, TNFINC representatives advised that that IBT would be unwilling to work with us, going forward, after YRC’s deal was ratified by its employees.”
Port of L.A. could sink $50 mil shipyard plan this week
A campaign by Gambol Industries to build a $50 million shipbuilding and repair business at the Port of Los Angeles may be torpedoed this week.
The Board of Harbor Commissioners will decide on Thursday whether to terminate exclusive negotiations with the Long Beach-based company, which has tried for nearly two years to open shop on the site of the shuttered Southwest Marine slips at Terminal Island.
Sinking Gambol's plan to build a shipyard would allow the Harbor Department to consider other uses for the old Southwest Marine terminal.
Gambol's executives believe the ship slips could be preserved by containing the soil behind a vertical steel wall.
Port officials have repeatedly warned that gaining the necessary federal and state permits for such a project would delay the channel dredging project for at least six months, and up to several years.
FedEx Corp. said it expects to ship 16 million packages Monday in what will likely be the busiest day in company history.
The Memphis, Tenn., company said shipments would be nearly 13 percent higher than its busiest day last year, and double the volume that FedEx handles on an average day.
From Thanksgiving to Christmas, the company expects to move more than 223 million packages around the world, an increase of 11 percent from the same period last year. FedEx expects to ship more than 63 million packages this week, up from 57.5 million last year. The shipments will be dominated by books from Internet retailers as well as clothing, electronics and luxury goods, the company said.
First half freight derivatives might be overpriced on tanker shipping
Freight derivatives used by traders to speculate on, or hedge, the cost of shipping oil may be overpriced for the first half of next year, taking into account the number of ships being built, a broker of the accords at Imarex Asia Pte said.
Forward freight agreements for very large crude carriers, or VLCCs, indicate rental income from the benchmark Saudi Arabia-to-Japan route of about $22,000 a day for the first half of next year, double the returns available from the spot market today, Kevin Sy, a broker at Imarex Asia, said by e-mail today.
There are 87 VLCCs due for delivery next year, according to estimates from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. That equates to 16 percent of the existing fleet, which stands at 547 ships.
The $5.25 billion being spent on widening of the Panama Canal is only the beginning of expenditures in the rush to accommodate giant container ships.
Billions more dollars will be spent in the United States, as ports rush to expand facilities to receive the post-Panamax ships passing through when the expansion is completed in 2014, one hundred years after it first opened.
The widening will lead to the biggest shift in the freight business since the 1950s, when ships first started using giant containers of equal size.
The expansion will enable products made in Asia to be sent directly to the East Coast instead of being unloaded on the West Coast and then sent east by train or truck.
A result could be a shift in business worth billions of dollars to ports, and big savings for companies like Ikea, Home Depot and Wal-Mart, always on the hunt for more efficient ways to serve shoppers in the Eastern third of the United States, where a majority of the U.S. population lives.
To capture some of the new traffic, almost every large East Coast port and those along the Gulf of Mexico have projects under way.
The newest, biggest ships can carry the equivalent of as many as 15,000 containers that are 20 feet long.
But they are also heavier, wider and require deeper water. In Savannah, for example, the water is only 42 feet deep. That is enough, with tidal variations, to handle ships loaded with 5,500 containers.
The port at Norfolk, Va., is 50 feet deep, and is the only one on the East Coast that can handle the biggest, fully loaded container ships.
The navigation channel that feeds the Port Newark-Elizabeth Marine Terminal in New Jersey is deep enough, but the Bayonne Bridge is not tall enough for the new container ships to pass under.
Officials at the Port Authority of New York and New Jersey are studying options. They might raise the bridge by 64 feet. A study estimated the cost at $1.3 billion.
As Savannah port officials are learning, digging up six feet of mud is not easy or cheap.
Environmentalists are concerned that dredging will cause historic Savannah buildings along the shore to tumble into the water, suck sand from the shores of Tybee Island and ruin freshwater marshes.
The Corps of Engineers’ environmental impact document, issued after a 14 year study, suggested deepening but not widening the channel to protect the buildings along the shore and adding 3,000 acres of wildlife preservation land to help offset the impact on freshwater marshes.
Freight industry analysts predict dry index pickup in Q1 (includes table)
Global shipbrokers, shipowners and analysts expect the Baltic Exchange's main sea freight index to rebound slightly in the first quarter of 2011 on strong Chinese demand for iron ore.
The following table details the forecasts from 11 industry officials and analysts on the Baltic Dry Index and time chartered averages for capesize and panamax vessels for the first three months of next year.
Chevrolet starts shipping extended range electric vehicle
General Motors has started shipping its Chevrolet Volt extended-range electric vehicles to its initial retail launch markets.
The first vehicles left the company’s Detroit-Hamtramck Assembly Plant yesterday, on the way to customers in California, Texas, Washington DC and New York.
A 160 vehicles are being shipped out this week, with the first customers likely to get their hands on their Volts within the next few days.
Volt marketing director Tony DiSalle said it was a “historic milestone” for Chevrolet. He said yesterday: “We have redefined automotive transportation with the Volt, and soon the first customers will be able to experience gas-free commuting with the freedom to take an extended trip whenever or wherever they want.”
World’s second largest fleet faces rising cost of its merchant marine
A lack of Greek officers and sailors is increasing costs for the country’s shipowners, who control the world’s second-largest fleet after China, PricewaterhouseCoopers International Ltd.’s Greek unit said.
Greek shipping companies prefer to employ Greek officers and are being forced to pay increased wages and benefits to retain them, PwC Greece said in a survey published on the company’s web site.
While Greek shipowners are able to source cheaper sailors from eastern Europe and the Far East, multi-ethnic crews mean that officers now need to develop leadership and communication skills to handle people from different cultures with different work attitudes and beliefs, according to the study.
As Greece’s shipping industry shows limited success in attracting new generations of domestic sailors, the management of diversity will be a criterion in the assessment of officers, the study, which covered 39,500 seafarers on 1,320 ships, said.
Congressional gridlock may thwart the Obama administration’s efforts to double U.S. exports over the next five years.
President Obama’s budget request for the fiscal year that began Oct. 1 called for a $78 million increase in funding for the Commerce Department’s International Trade Administration, of which $62 million was supposed to go to the U.S. and Foreign Commercial Service, the government’s primary export promotion agency.
The Senate approved a $68.5 million increase, while the House approved a $58.5 million increase.
However, the two chambers have yet to reach agreements for any federal agency for fiscal 2011.
Instead, Congress has simply agreed on a continuing resolution to keep funding at the same levels as in fiscal 2010 until the Senate and the House reach final agreements for each department or pass an omnibus bill that would cover most departments.
As a result of the stalemate, the Commercial Service is continuing to operate at an annual level of $265 million, the same as in fiscal 2010, said Suresh Kumar, the agency’s director general.
Under the planned increase, the Commercial Service would have been able to hire up to 328 new trade experts to assist U.S. companies or to open any new offices or start new programs. “It’s all budget dependent,” Kumar said in an interview after speaking to the World Trade Centers Association in New York Monday evening.
“The value of the services we provide is significantly more than what we spend,” he said.
Kumar said he is aware of the obstacles to U.S. exports created by shortages of vessel capacity and containers.
The agency’s services include one-to-one counseling, market research and trade missions. It conducted 39 trade missions in fiscal 2010, and the number of participating companies was up. Participation was also up in its International Buyers Program, which helps brings prospective foreign customers to U.S. trade shows and other events.
U.S. merchandise exports from January through October of this year totaled $1,048 billion, a 21 percent increase over the same period last year.
U.S. exports total 11 percent of Gross Domestic Product, compared with 40 percent in Germany, more than 30 percent in Canada and 25 percent in China, Kumar said.
Less than 1 percent of U.S. companies export, and the majority of those export to only one or two countries, he said.
In his speech, Kumar said green technology offers the best prospects for U.S. export growth. He said the Energy Department’s Advanced Research Projects Agency-Energy is spurring investment in green technology ARPA-E is modeled after the Department’s Defense Advanced Research Projects Agency, which led to the creation of the Internet and Global Positioning Satellite technology.
He cited a recent agreement with the Hong Kong Trade Development Council called the Pacific Bridge Initiative as an example of the Commercial Service’s efforts to promote U.S. exports. The Hong Kong business group is encouraging U.S. companies to use Hong Kong as a base for increasing exports to Asia, primarily the Chinese mainland.
The Commercial Service has offices in 109 U.S. cities and 127 cities in 79 foreign countries. More information about the agency is available at export.gov.
FedEx wins driver lawsuit
FedEx Corp. drivers were found by a judge to be independent contractors in a nationwide series of lawsuits claiming the company treats them as employees and owes them full benefits.
U.S. District Judge Robert Miller in South Bend, Indiana, yesterday threw out claims of drivers in 20 class-action cases in California, New York, New Jersey and other states alleging the company misclassified their employment status and owed them back pay, overtime and other damages.
FedEx saves money by using contractors because it doesn’t offer them the same benefits and vacation time as it does employees. The company has encouraged its contractors to consolidate routes and hire their own subcontractors in an effort to bolster its position that the workers are small- business owners and not employees.
The contractor model gives FedEx’s Ground unit a cost advantage of as much as 30 percent over Atlanta-based UPS, University of Pittsburgh business professor Marrick Masters has estimated.
Miller found that the drivers are independent contractors in 20 of the 28 remaining group lawsuits, and ruled in favor of FedEx on some claims in the other eight class-action cases, Lane said. In three cases, the court ruled against FedEx on at least one claim, he said.
Fate of ABF’s lawsuit against YRC subsidiaries, Teamsters, decided Thursday
A federal judge on Thursday will decide whether Fort Smith-based ABF Freight System has standing to sue competing truckers and the Teamsters in U.S. District Court.
ABF on Nov. 1 filed a federal lawsuit alleging that subsidiaries of YRC Inc. and the International Brotherhood of Teamsters violated terms of a multi-employer labor contract by entering into side deals that the gave the YRC companies an improper competitive advantage over ABF.
ABF seeks court appointment of a neutral third-party tribunal to hear its grievances, or, alternatively, nullification of the side agreements plus damages of $750 million.
In response, the defendants filed motions seeking to dismiss the case, claiming the court lacks jurisdiction over the matter.
The hearing begins at 10 a.m. Thursday in the Eastern District courthouse in Little Rock, with U.S. District Judge Susan Webber Wright presiding.
Regal Logistics announced it has acquired a new 351,000 square-foot distribution center in Charleston, South Carolina.
Exact terms of the deal were not disclosed other than what the Fife, Wash.-based third party logistics revealed in a statement as “a multi-million dollar investment.”
Regal Logistics said the distribution facility is three miles from I-526, and four miles from Port of Charleston’s Wando Welch marine terminal. The facility also offers foreign trade zone and drayage zone status, the company said.
“Regal's expansion in the U.S. Southeast is in direct response to manufacturers, importers and exporters’ demand for an ideal east coast ship point to satisfy major retailers like Walmart,” said Regal Logistics Vice President Garry Neeves. “Regal's facility is already attracting new business to the area in the form of manufacturers and importers shipping product through the Port of Charleston for distribution to major retailers in the East,” he said.
South Korean trawler sinks off Antarctica; 22 crew killed
The nationalities of 22 seamen killed when a South Korean trawler sank in icy waters off Antarctica have been released.
The dead crewmen from the deep-sea trawler No. 1 Insung were seven South Koreans, seven Indonesians, four Chinese and four Vietnamese, Maritime New Zealand said on Wednesday.
It said the bodies of two Koreans, two Indonesians and a Vietnamese were recovered by another South Korean vessel shortly after the trawler sank early on Monday, while the other 17 were lost in the freezing Southern Ocean.
No reason has yet been established for the sinking, although the boat's owners say it went down in less than 30 minutes and may have collided with an iceberg.
Maritime NZ said the trawler sank so quickly it did not send a mayday and the crew had could not put on protective gear before they plunged into the freezing waters, meaning they would have died after two hours.
The remote location of the accident meant rescue coordinators in New Zealand, more than 1,500 nautical miles away, had no opportunity to mount a major search operation and efforts to find the men were abandoned Tuesday.
FedEx Corp. reported an 18% decline in profit for its latest quarter but raised the company’s forecast for the year, saying the courier has become more optimistic about global economic trends.
"The global economic picture is increasingly more positive as the recovery continues at a steady pace," Chief Executive Fred Smith said in a conference call Thursday. "We’re now more bullish about the remainder of the year."
Results for FedEx’s fiscal second quarter were hurt by higher maintenance expenses aimed at keeping up with demand, as well as by increased labor costs as the company reinstated some benefits trimmed in the economic downturn. The Memphis, Tenn., company also recorded restructuring costs at its domestic trucking unit.
Volume in FedEx’s high-margin International Priority shipping business, which has been buoyed by demand in Asia, climbed 11% in the quarter through Nov. 30, though the pace of growth slowed from the two prior quarters. Asia "is moderating toward more normal growth rates," Mr. Smith said, but is "still the world’s economic engine."
FedEx posted a second-quarter profit of $283 million, or 89 cents a share, down from $345 million, or $1.10 a share, a year earlier.
Revenue jumped 12% to $9.63 billion. Analysts were expecting $9.7 billion.
Sales in the express-shipping segment—FedEx’s biggest contributor to revenue—jumped 13% as international-priority average daily volume increased 11%, led by exports from Asia. U.S. domestic revenue per package rose 5% while average daily package volume increased 3%.
Revenue for the ground-shipping segment also rose 13%, as average daily volume rose 7%.
Freight revenue climbed 14%.
Florida Chamber unveils ports, trade, logistics study
On Wednesday, the Florida Chamber Foundation unveiled its study of ports, trade and logistics in the Sunshine State -- and argued that an increased focus on these industries could lead to an additional 143,000 jobs in the state.
The study maintained that Florida’s geographic position and the expansion of the Panama Canal expected to be finished in 2014 could lead to increased trade through the Sunshine State, especially if Latin America and the Caribbean rebound from their current sluggish economic climate.
“This comprehensive study highlights the importance of investing in Florida’s trade and logistics future,” said President Al Stimac of the Manufacturers Association of Florida. “This investment is essential to Florida becoming a major global competitor and job creator and fits fully in Governor-elect Scott’s 7-7-7 plan.”
“Florida’s domestic and international trade flows are growing at a rapid pace,” added Bill Johnson of the Port of Miami. “This study provides the state with a blueprint so that we don’t miss an opportunity to grow along with it.”
The study called for Scott to serve as an ambassador of Florida economic development: getting at least one port ready in time for the Panama Canal widening in 2014; creating greater exports of Florida products; expanding Miami International Airport; getting the state DOT to come up with a plan to tie the state’s hubs together through a strategic intermodal system; and investing in trade and transportation in the future.
Supertankers shipping 2 million- barrel cargoes of Middle East crude oil are heading for the worst December since at least 2001 as excess vessel supply cuts what owners can charge.
Returns from shipping Middle East oil to Asia, the industry’s biggest trade route, averaged $15,350 a day so far this month. The previous worst December was in 2001, when rental income averaged $19,341, according to data compiled by Bloomberg dating back to that year.
There has been a 16 percent surplus of VLCCs for hire in the Persian Gulf so far during the fourth quarter, according to Bloomberg News surveys. In the fourth quarter of 2009, the average excess was 11 percent.
Charter rates on the industry’s benchmark Saudi Arabia to Japan voyage, the benchmark route for very large crude carriers, or VLCCs, advanced 2.9 percent today to 52.85 Worldscale points, according to the Baltic Exchange in London today. Returns from the route jumped 22 percent to $9,295 a day, according to the bourse.
The Baltic Dirty Tanker Index, a wider measure of crude oil transportation costs, added 1 percent to 1,039 points today, according to the exchange.
Next year, VLCCs with a combined transportation capacity of 27 million deadweight tons are scheduled to join the fleet, according to data from Clarkson Research Services Ltd. a unit of the largest shipbroker. That constitutes 16 percent of the existing fleet’s capacity of 165.4 million tons, Clarkson data show.
The Washington Public Ports Association (WPPA) awarded the Port of Vancouver USA as the 2010 Port of the Year.
The announcement was made back on November 19 at the association’s annual meeting in Tacoma, Wash.
Each year, the WPPA’s executive committee honors a WPPA member port for “leadership and innovation in economic development efforts.”
According to the WPPA, the Port of Vancouver was honored for creating transportation connections including the June 2010 completion of a state-of-the-art unit train facility at the port’s recently developed Terminal 5.
The $14 million project is part of the West Vancouver Freight Access rail improvement project, and according to the port in a press release, was completed on-time and on-budget.
The award also acknowledged the port’s role as a sponsor port in the recently completed Lower Columbia Channel Deepening Project, the press release said.
At least fifty believed dead from shipwreck on Christmas Island’s cliffs
(Includes link to video footage of wreck)
More than 50 boat people may have perished when their rickety wooden craft smashed against rocks off Christmas Island, but the final death toll will probably never be known.
The treacherous swells and atrocious weather that caused Wednesday’s tragedy continued to hamper rescue efforts yesterday.
Searchers scoured wreckage for signs of life but feared further deaths.
Last night 28 asylum seekers had been confirmed dead, while at least 42 survived, including 11 children and teenagers.
Australian authorities believe up to 100 men, women and young children from Iraq and Iran were on board the 16m fishing boat when it was pummelled against rocks.
Packed on to the small boat, the would-be refugees had come within "arm’s reach" of their final destination - the rugged Australian territory in the middle of the Indian Ocean.
But just after dawn, in heavy seas whipped up by monsoonal storms, the vessel’s engine failed.
Residents who rushed to the scene watched helplessly as massive waves tossed the terrified human cargo towards limestone cliffs for almost an hour.
And they described how screams pierced the air as the boat slammed on to the jagged coastline and eventually disintegrated.
Horizon Lines, Inc., the Charlotte, NC-based ocean carrier known for being the leading domestic ocean services and logistics company, announced that the first vessel in its inaugural international shipping business departed Shanghai via its new trans-Pacific Five Star Express (FSX) service.
The company said in a press release that the 2,824-TEU Horizon Hawk called Ningbo on December 13, departed Shanghai December 15, and will arrive at the Port of Los Angeles December 26 before sailing on to Oakland and returning to Guam and China as part of its regular port rotation.
"The Five Star Express launch is an historic milestone in the evolution of Horizon Lines as we re-enter the international market, and a real credit to all of our associates who made it possible," said Brian Taylor, senior vice president of international services.
Taylor, in addition to his responsibilities for international services, is assuming the newly created role of Chief Commercial Officer (CCO) of the company, making him responsible for all sales and pricing, the company said.
The shipping line said its is promising an 11-day port-to-port transit from Shanghai to Los Angeles with Monday morning cargo availability each week .
The new Five Star Express Service’ port rotation port rotation is Los Angeles - Oakland - Guam - Ningbo - Shanghai - Los Angeles.
Arkansas federal judge dismisses ABF lawsuit
A federal judge in Arkansas will dismiss an ABF Freight System Inc. lawsuit that sought to overturn a series of worker concessions negotiated between YRC Worldwide Inc. and the International Brotherhood of Teamsters union.
Following a Thursday hearing, U.S. District Judge Susan Webber Wright granted motions by Overland Park-based YRC and the Teamsters to dismiss the suit due to lack of standing. An order was expected to be entered later.
On its website about the legal actions, ABF said it is disappointed by the judge’s decision and still thinks the Nov. 1 lawsuit is strong.
ABF, based in Fort Smith, Ark., claimed that the three rounds of concessions negotiated between certain YRC subsidiaries and the union, and approved by Teamsters members, violated the National Master Freight Agreement, a contract covering truckers and dockworkers across the country.
YRC and the Teamsters argued that ABF removed itself from the national contract in 2008 to negotiate its own contract and couldn’t file suit.
Hitachi opens new distribution for the Americas in Oklahoma
Corporate officials and local dignitaries attended the official unveiling of Hitachi’s new 200,000-square-foot expansion Thursday afternoon in southeast Norman.
Company officials said the new facility, which brings with it the promise of 75 “high-quality” jobs, will become the hub of the Japanese manufacturer’s North American and South American distribution operations.
Frans Van Rijn, senior vice president of global logistics for Hitachi Data Systems, said the new facility in Norman must help the company deal with a fast-changing business environment.
He also said the decision to relocate the distribution hub to Norman “impacts many people and many organizations” throughout the world.
“We did this to stay ahead of the competition and to prepare for fast growth,” Van Rijn said.
He said the economy, which continues to struggle, will demand that Hitachi’s workforce be creative as they meet their clients’ ever-changing needs.
A cargo ship capsized in waters off the central province of Ha Tinh leaving 25 sailors and two passengers missing in strong gales and rough seas yesterday morning.
The victims have not been heard from since while harsh conditions are preventing rescue ships from reaching the site where the Phu Tan went down, about 120km off the coast of Ha Tinh Province.
Hai Phong Port Authorities received a distress call from the ship at around 7.30am reporting that the ship was sinking and a few hours later, they lost contact with the ship.
The Hai Phong Port Authority said the sailors and passengers may have fallen overboard.
The Maritime Search and Centre Co-ordination Centre for Region 1 dispatched rescue vessels to search for the ship and ordered the Song Cau oil tanker which was operating near the scene to help with the rescue mission.
According to Xinhua News Agency, Chinese maritime rescue authorities also dispatched a rescue vessel to help after receiving emergency calls from their Vietnamese counterparts.
The Phu Tan was owned by the Viet Nam National Shipping Lines Company and had a loading capacity of 140,000 tonnes. It was on its way to Hai Phong from HCM City when the accident happened.
$1.4 mil in crystal meth seized at Arizona-Mexico border
Border authorities say they've seized more than 13.6 kilograms of crystal meth that a man was trying to smuggle into Arizona from Mexico.
U.S. Customs and Border Protection officers say they stopped a pickup truck at the Douglas Port of Entry last Friday.
An inspection led to the discovery of several packages of crystal meth concealed inside a compartment built into the firewall behind the truck's back seat. They say the packages of crystal meth has an estimated street value of $1.4 million.
Authorities say the driver of the truck was an 18-year-old man who's an American citizen but a resident of Hermosillo, Sonora. The unidentified suspect was turned over to Immigration and Customs Enforcement for prosecution.