Cargo Business Newswire Archives
Summary for December 16 through December 20, 2013:

Monday, December 16, 2013

Top Story

BNSF railway rearranges top leadership, retaining Rose as chair

Burlington Northern and Santa Fe Chairman and CEO Matt Rose, who was at the helm when Berkshire Hathaway purchased BNSF in 2010, will become the railroad's executive chairman in January.

The current chief operating officer, Carl Ice, will be promoted to president and chief executive. Rose will lead long-term strategic planning while Ice focuses on day-to-day operations.

Warren Buffett, Berkshire Hathaway's chairman and CEO, praised both Rose and Ice, saying BNSF has exceeded his expectations since Berkshire bought the railroad.

"BNSF's performance has far exceeded the high expectations I had at the time of Berkshire's purchase," Buffett said in a statement. "The combination of Matt's and Carl's talents is the perfect arrangement for the future."

Some investors have reportedly wondered if Rose is a candidate to eventually succeed 83-year-old Buffett as CEO of Berkshire and its more than 80 units that span the manufacturing, retail, energy and insurance industries.

"He's eminently qualified," said independent rail analyst Anthony Hatch in a phone interview. "He's spent time trying to understand his customers' businesses that range over every aspect of the economy. And when you talk about running Berkshire, it's a company with that kind of breadth, so he'd be well positioned."

For more of the Dallas Morning News story:

Governor gives Port of Portland reefer jobs to ILWU with hopes to retain Hanjin

Oregon Gov. John Kitzhaber has brokered an agreement to give Port of Portland reefer ship maintenance jobs to International Longshore and Warehouse Union workers, hoping to resolve chronic labor issues and retain the business of Hanjin Shipping, which has threatened to leave the port in 2014 after labor unrest led to terminal work stoppages and delays over the past year.

On Thursday Kitzhaber's office said work to plug and unplug refrigerated ships at Portland's container Terminal 6 would now be assigned to workers represented by the ILWU.

The Port of Portland and International Brotherhood of Electrical Workers Local 48 agreed to terms to transition this work from representation by IBEW 48 to workers represented by ILWU. ILWU workers will perform the work of plugging and unplugging reefer ships as soon as the port is able to contract with an ILWU employer for the work.

"With the resolution of this key dispute, we can keep Terminal 6 a competitive, productive, and internationally attractive container terminal," Kitzhaber said in a prepared statement. "This agreement should provide assurance to container companies and businesses around Oregon that the conflict over this work will no longer be a factor in terminal operations."

As part of the agreement, the Port of Portland guarantees that no IBEW 48 members will lose work as a result, and that they will be assigned other port-related duties. In addition, the port ensures that IBEW 48 will service future port-owned facilities, and the port and IBEW 48 will enter into a new apprenticeship arrangement.

The Port of Portland will also provide weekly reports on Terminal 6 productivity to the governor's office.

For more of the Portland Tribune story:

German Amazon workers take protest to Seattle

Employees of Amazon in Germany, the company's second largest market, have been hitting the online retail giant with a series of wildcat strikes, most recently at the end of November. The protests are the first ever launched against the company, and involve hundreds of Amazon workers at two German fulfillment centers who want higher wages and better job security.

On Monday the strikers are hoping to increase their visibility by demonstrating at the retailer's Seattle headquarters. A rally is scheduled for 10 a.m., and organizers hope to attract local union support as well as sympathetic members of the public.

The German labor union Ver.di wants Amazon workers classified as retail employees, but Amazon says they are logistics workers who should be paid less.

The warehouse workers want to have a say over their working conditions. The employees, also known as "pickers," assemble the orders. They say picking is hard physical labor, with constant monitoring and little job security.

Amazon wants to retain maximum flexibility in terms of how it uses its workers and negotiating would impede efficiency and innovation, said Dave Clark, the company's vice president of worldwide operations and customer service, to The Times last summer.

"As a worldwide company," emailed Markus Hoffmann-Achenbach, an organizer for Ver.di who will participate in the Seattle demonstration, "Amazon should treat their workers fairly and with respect in every country. The solidarity of American unions and Ver.di, the united services union of Germany, is a sign that social movements are not bounded by national borders and that in times of globalization the workers worldwide stand together as one."

Ralf Kleber, the top Amazon executive in Germany, reportedly dismissed the strikers in a recent interview with Reuters, saying the walkout did not slow down deliveries. He was also quoted as saying the workers were largely unskilled and had been unemployed for a long time.

For more of The New York Times story:

Feds okay development of largest transshipment facility in U.S.

The Louisiana International Gulf Transfer Terminal Regional Center announced it has received a green light from the U.S. Citizenship and Immigration Services that allows the development of the largest transshipment facility in the U.S., to be known as the Louisiana International Gulf Transfer Terminal.

The terminal will open up a new supply chain via the Mississippi River and tributaries that reaches 32 states and Canada, while creating jobs and reducing environmental concerns related to the transportation industry, according to the LIGTT statement.

Because of its location in deep water (minimum 70 feet), it will be able to accommodate the massive Post-Panamax vessels expected transit the expanded Panama Canal in 2015. It will also be able to handle the Super Post-Panamax ships currently in operation.

The terminal will use a hub and spoke system for sailing goods to and from America's heartland, the statement said, expanding America's shipping capacity by more than 2 million TEUs a year – with an ultimate goal of raising by 3.5 million TEUs.

"This is a major infrastructure opportunity for this country. With this terminal in place, America will be ahead of the curve and able to keep pace with modern international trade, particularly as the Panama Canal undergoes its historic, first-ever expansion," said Admiral James Milton Loy, former deputy secretary of the U.S. Department of Homeland Security and former commandant of the U.S. Coast Guard. "The Gulf of Mexico provides an ideal location to maximize shipping routes through other ports and inland waterways that until now have been largely untapped."

Tanker operators fined for non-compliance

The Coast Guard has issued fines to three ship operators in violation of federal regulations related to tank vessel response plan requirements.

Tank vessels bound to or from a U.S. port and transiting through the Western Alaska Captain of the Port zone must have an approved geographic specific appendix in their vessel response plan for Western Alaska before transiting within the zone if carrying oil in bulk as cargo or oil cargo residue.

The Pacific Galaxy (operated by Synergy Maritime PET), the Tamar (operated by MTM Ship Management), and Yayoi Express (operated by MOL Tankship Management) have been issued a monetary violation for non-compliance with Title 33 Code of Federal Regulations Part 155 Subpart D in Alaska.

Vessel operators can face penalties of up to $11,000 per violation, per day.

For more of the Alaska Native News story:


Wednesday, December 18, 2013

Top Story

Maersk changes ownership arrangement to gain fiscal agility

The A.P. Moller Foundation, which controls oil and shipping giant A.P. Moller-Maersk, will transfer its stake in the business to a new holding company in order to increase its fiscal flexibility.

The Danish company is controlled by the Maersk family but must use all dividends it receives from the shipping group for donations to benefit the public in Nordic countries.

However, by moving the 41.51 percent shareholding and 51.09 percent of all A.P. Moller-Maersk voting rights into A.P. Moller Holding, it will be able to retain funds as a cash reserve to be used by the shipping business.

"With the establishment of the holding company the A.P. Moller Foundation wants to secure and strengthen its active ownership and provide financial flexibility and a financial buffer for the whole group," said Ane Maersk McKinney Uggla, the foundation's chairman, in a statement this week.

The group's 2012 dividend payout totaled $972 million.

A.P. Moller Foundation said that the new holding company will continue to honor the foundation trust deed by supporting cooperation between Denmark and the other Nordic countries, promoting Danish shipping and industry and supporting science and charitable causes.

For more of the Reuters story:

Port of Los Angeles November cargo volume up 17 percent, Long Beach also up

Cargo volume at the Port of Los Angeles in November jumped 17.3 percent year-over-year after months of declines due to business shifting to the Port of Long Beach, which reported at 2.5 percent increase compared to November 2012.

The rebounding numbers at the nation's largest port is a positive indicator for the U.S. economy, according to port officials.

Los Angeles experienced a 17.3 percent jump in overall cargo flow for November, moving 683,849 TEUs, compared to 582,981 TEUs in 2012. Imports increased 18.7 percent to 342,247 TEUs, while exports surged 23.3 percent to 179,175 TEUs.

Port of Los Angeles officials said the increases were due, in part, to bigger ships calling at the port.

"All of our container terminals have been trending upward from last year," said Port of Los Angeles spokesman Phillip Sanfield, adding that the demand for goods has increased as more people begin finding work and securing the capital to fix their homes.

Meanwhile, Port of Long Beach reported a 2.5 percent uptick in cargo in November year-over-year, a tapering off of the substantial gains shown throughout much of the year due to an increase in business. Mediterranean Shipping Co. and France-based CMA CGM recently decided to make the Port of Long Beach their West Coast hub.

Long Beach moved 569,599 TEUs in November. Imports rose 6.5 percent to 296,638 TEUs and exports increased 9.9 percent to 151,950 TEUs.

"Things are holding steady for us," Port of Long Beach spokesman Art Wong said.

For more of the Press-Telegram story:

U.S. car exports up 8.9 percent, boosting carrier revenue

The U.S. exported a record 1.8 million vehicles in 2012, and shipments increased another 8.9 percent in the first 10 months of 2013, according to Commerce Department data, increasing the bottom line for car carrier operators.

American carmakers, recovering from the worst slump since the Great Depression and from the federal bailouts for General Motors and Chrysler, are expanding sales overseas. Ford said this month it would sell Mustangs in 110 countries, the most in the car's 50-year history. Foreign manufacturers such as BMW are also increasing exports from U.S. factories.

"It's another signal that the U.S. auto industry is out of firefighting mode," said Jeff Schuster, senior vice president of forecasting an LMC Automotive, a research company in Troy, Michigan. "There is an opportunity and an expectation for the shipping industry to see more activity out of this region."

Average rates for ships able to carry at most 6,500 cars will jump 4.1 percent to $25,500 a day in 2014, the highest since 2008, according to RS Platou Markets AS. The investment bank also forecasts that utilization will spike to a six-year high of 87 percent as demand increases 3.6 percent and the fleet expands 2.7 percent.

"Any time that you can maximize utilization of a vessel in a trading pattern is going to increase profitability," said Richard Heintzelman, executive vice president at Wallenius Wilhelmsen Logistics Americas. "The U.S. is a bright spot certainly from an exporting perspective."

For more of the Bloomberg story:

Hyundai Merchant Marines to deploy 6 new vessels on Asia-U.S. trades

Hyundai Merchant Marines, an affiliate of the South Korea's Hyundai Group, announced it will deploy six large container vessels on its Asia-U.S. East Coast trade route.

The company said it signed a charter contract with London's Zodiac Maritime Agencies to lease the 10,000-TEU vessels.

The six ships, to be built by Daewoo Shipbuilding and Marine Engineering, will start sailing in 2016 and will be assigned to the route for 12 years.

Hyundai said it also plans to deploy five 13,100-TEU container carriers on its Asia-Europe line as of 2014, bringing their total fleet handling cargo from Asia and Europe to 10.

"Once all the ships are in operation in 2016, Hyundai Marines will have 16 10,000 TEU-plus ships in its fleet which is expected to reduce cargo costs for users," the company said.

For more of the Yonhap News story:

Cargo ship collides with container carrier

Thirteen sailors were rescued after two ships collided Sunday morning, according to the China News Service.

A Chinese cargo ship collided with a Greek container ship at 6:20 a.m.

The Chinese vessel, on its way to Lianyungang from Ningbo, began taking on water after the crash.

A rescue boat deployed by Donghai Rescue Bureau of the Ministry of Transport rescued the 13 crewmembers.

For more of the ECNS story:


Thursday, December 19, 2013

Top Story

P3 Alliance will likely get approval from global regulators, insiders say

The U.S., European and Chinese regulators reviewing the P3 Alliance are likely to approve a three-way alliance among the world's biggest container shipping companies – Maersk Line, Mediterranean Shipping Company and CGA CGM – but not before demanding concessions from the companies to limit their dominance on the busiest global trades, according to insiders who spoke to the Wall Street Journal.

The three shipping lines had planned to begin operations of the P3 Alliance in the second quarter of 2014, but regulatory approval won't come until later in the year, said the anonymous sources.

Senior officials of the U.S. Federal Maritime Commission, the EU's Competition Commission and China's transport ministry met in Washington Tuesday to scrutinize the planned alliance.

"The regulators have determined that the P3 isn't a merger, but an alliance," said one source. "This means that it will probably be approved, but it will include clauses to protect parties like cargo owners, fuel providers and smaller competitors from price fixing and unfair competition."

Shipping customers such as freight forwarders, importers, and exporters are trying to block the alliance, saying they will have no say in negotiating contract freight rates with the container-shipping companies. Fuel suppliers are concerned that once P3 is up and running they won't be able to individually broker fuel prices with the three vessel operators. Some smaller container lines worry they will be pushed out of the market trying to compete with a shipping partnership that owns the world's largest fleets and biggest individual ships.

"Some of these concerns will be addressed by adding clauses as part of the regulatory approvals," the source said. "The regulators believe they will reach an agreement with the three ship operators and the P3 will then satisfy all legal prerequisites."
The likely approval of P3 comes in the middle of a separate price-fixing probe of container shipping companies, including Maersk, MSC and CMA CGM, by European and Russian regulators.

"The probe has no set time limit and although it is separate from the P3, it adds to concerns by the regulators and could push back the approval process," said another person directly involved in the negotiations.

For the three shipping companies, the pact's benefits involve sharing ships and port facilities from Shanghai to Rotterdam, New York and the U.S. West Coast, as weak global economic growth, chronic low freight rates and high fuel costs hurt their profit margins.
If approved, the P3 will control an estimated 43 percent of Asia-to-Europe container shipping, 41 percent of the trans-Atlantic market and about 24 percent of the trans-Pacific market.

For more of the Wall Street Journal story:

General Motors invests $1.3B on manufacturing centers

General Motors will invest nearly $1.3 billion at five manufacturing sites in Michigan, Ohio and Indiana to on new fuel-efficient engines and transmissions, better vehicle quality and streamlined logistics.

The investments at the GM plants will facilitate the production of a new V6 engine, new 10-speed transmission and an existing 6-speed transmission. In addition, the money will pay for factory upgrades at factories located in Detroit, Flint and Romulus, Michigan; Toledo, Ohio and Bedford, Indiana.

"GM is committed to a strong American manufacturing base and creating jobs in dozens of communities throughout the country. Today's announced plant upgrades continue the momentum of a resurgent auto industry," said Mark Reuss, GM executive vice president and North America president. "More importantly, these investments add up to higher quality and more fuel-efficient vehicles for our customers."

The GM investment includes $600 million to Flint Assembly for facility upgrades, including a new paint shop; $493.4 million in Romulus Powertrain Operations, including $343.4 million for equipment to produce an all-new 10-speed automatic transmission and $150 million to increase capacity of a previously announced new V6 engine; and $121 million in Detroit-Hamtramck Assembly for a logistics optimization center.

The investments combined will create or retain about 1,000 jobs.

For more of the Area Development story:

FedEx volume up on ecommerce, while profits miss estimates

Although FedEx is delivering more parcels than ever, with more than 22 million packages handled on Monday making it the busiest single day in company history, the company missed analyst sales and profit estimates.

FedEx most positive report came from its ground-shipping unit, which is linked closely to online shopping. Sales in the department jumped 10 percent, while average daily package volume surged 8 percent.

However, analysts had expected more from FedEx. Although total sales ticked up 3 percent to $11.4 billion, and profit increased 14 percent to $500 million, the company missed estimates on both fronts.

Although net income rose to $500 million, or $1.57 a share, earnings on that basis fell short of the $1.65 average of analysts' estimates compiled by Bloomberg, partly because of a reduced operating margin at its FedEx Ground unit.

FedEx said it missed targets, in part, because it was building capacity and repairing some of its vehicle fleet in advance of the holiday rush. It has also been fine-tuning a new program that lets Web shoppers schedule FedEx deliveries.

"Even though there's a tremendous amount of talk about e-commerce, we're still in very much the early stage development of this channel," said FedEx's Michael Glenn, an executive vice president, to Bloomberg. "We sit right in the sweet spot of it."

For more of the Bloomberg stories: and

Port of Tacoma container volumes up in November

Container volumes at the Port of Tacoma in November were up 3 percent year-over-year on last-minute additions to retail inventories for the holiday season, according to a port statement.

Year-to-date, the port announced international container volumes were up nearly 17 percent. Imports went up 16 percent on the year to 632,089 TEUs, and exports rose almost 19 percent to 476,828 TEUs. Domestic volumes were down 1 percent year-to-date to 410,869 TEUs.

Although volumes remained down 45 percent year-to-date, grain exports improved in November for the second consecutive month, the statement said, indicating a possible rebound after severe drought in the U.S. Midwest and increased competition from South America.

Intermodal rail lifts continued to reflect growth in container volumes, posting a 13 percent gain.

Breakbulk volumes were down 23 percent, said the port, after posting record volumes in 2012.


Pirates kidnap cargo ship captain and engineer

A dozen armed men attacked the Greek cargo ship Althea on Tuesday while sailing between Nigeria and Guinea.

The pirates have taken two of the crew members of the Marshall Islands-flagged ship. The Greek Shipping Ministry reported the Greek chief engineer of the ship and the Ukranian captain were kidnapped.

According to the Shipping Ministry, there were 18 crew members on board. The rest of the crew is safe and no injuries have been reported.

The pirates took the personal belongings of the crew, but not the oil transferred by the ship between local ports.

For more of the Greek Reporter story:


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