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Lufthansa Pilots to Strike Next Week |
Union demands arbitration of pay, job security issues
April 7, 2010 - Pilots at Lufthansa vowed to go ahead with a four-day strike next week unless the German carrier agrees to terms for arbitration to resolve a dispute over pay and job security.
The strike by some 4,500 pilots which is due to start on April 13 will also affect Lufthansa Cargo and Lufthansa's low cost subsidiary germanwings.
But the walkout will have only a minimal impact on Lufthansa Cargo's freighter operations as seventeen of its managers have licenses to fly its MD-11 cargo aircraft.
Lufthansa Cargo said it would fly 90 percent of its freighter services during a planned four-day strike in February which was called off after one day.
Lufthansa Cargo will also switch freight booked to fly in the belly holds of Lufthansa's passenger aircraft to rival carriers.
Lufthansa welcomed the pilots' willingness to take the dispute to arbitration but said the Cockpit union must first call off the strike before it will return to the negotiating table.
The airline, Europe's second largest, said it lost $65 million in revenue in the one day stoppage last month.
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Manufacturing and Logistics Challenges in Thailand - A Supply Chain Asia Dialogue |
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April 1, 2010 - Thailand has a unique advantage because of its geographical location. It provides easy accessibility to all major ports in the vicinity, including Japan, China and India as well as emerging economies like Cambodia, Vietnam and Laos. Thailand has also committed to the South Asia Free Trade Agreement (SAFTA) and the Indo-Thai Free Trade Agreement, which have improved its trade ties within the region. These factors have resulted in the growth of some major ports like Laem Chabang, Klong Toey and Bangkok.
Thailand also has an extensive road network. With a road density of around 125.7 kilometers per thousand square kilometers, Thailand presently ranks third in the ASEAN region. With the possibility of a Trans-Asian highway networking most countries on the Asian mainland, Thailand could become a regional logistics hub of ASEAN as it is contiguous with countries such as Laos, Cambodia, Malaysia and Myanmar. In addition, the Government has taken initiatives to improve the country's road and rail infrastructure network to match global standards.
The growth of air transport infrastructure also has the potential to place Thailand at a logistical advantage. The opening up of the Suvarnabhumi airport also serves to boost Thailand's position in the regional airfreight market.
However, there are some challenges that Thailand must overcome in order to be a regional logistics hub. It needs to address competition from other potential logistics hubs in the region. Singapore, which currently serves as a regional logistics hub for many companies in South East Asia, will be Thailand's number one competitor. It already has a well-established air and ocean transport infrastructure.
Singapore also has the busiest port in the region, with an annual capacity of more than 20 million TEUs. It also has a state-of-the art airport with good logistics support infrastructure and global connectivity. The country has a highly advanced information and communication network.
Malaysia is another major threat for Thailand in its pursuit to be the logistics hub of ASEAN. Malaysia is a rapidly developing nation with very good infrastructure in place. The country has five international airports and two seaports, which offer state-of-the-art logistics, support infrastructure including huge logistics parks within their vicinity. There is an excellent road network connecting all these major ports and government is trying to further spruce up the infrastructure.
In comparison, Thailand still lags behind Singapore and Malaysia in terms of infrastructure development. It may take a few more years before it becomes a viable alternative to Malaysia or Singapore. Political uncertainty and civil unrest in some provinces could slow the growth of infrastructure.
Besides, the logistics cost in Thailand is almost 20 percent of its gross domestic product (GDP). In comparison, Singapore and Malaysia's cost of logistics are about 8 percent and 13 percent of their GDPs respectively. Apart from the limitations in transportation and warehousing infrastructure, the communication and information networks in the country also need to evolve significantly to match those of its rival neighbors. Human resources are a big challenge for the logistics industry in Thailand. Identifying the right people to do the job and training and helping them to hone their skills need a lot of investment from logistics companies.
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Containers up 4 percent; Shipping ministry plans additional capacity
April 6, 2010 - Cargo volume at major ports in India surged 5.68 percent in fiscal 2009-10 compared with a year earlier, the Indian Ports Association said in a statement on Tuesday.
Consolidated throughput for the fiscal year ended March 31 was estimated at 560.7 million tons, up from 530.5 million tons in 2008-09.
The IPA data indicates that among the 12 gateway hubs, seven reported significant gains in overall traffic movements.
Kandla emerged as the top cargo handler for the third year in a row with throughput of 79.5 million tons.
Total container traffic increased 4.32 percent to 6.87 million 20-foot equivalent units from 6.59 million TEUs, despite the slump in global trade particularly during the first half of the year.
The Port of Jawaharlal Nehru (Nhava Sheva), India's largest container gateway, reported its highest-ever annual throughput of 4.06 million TEUs, up 2.8 percent from 3.95 million TEUs the previous year. Volume improvements come as the Shipping Ministry plans to augment the overall port capacity to 1 billion tons by 2012, from about 575 million tons now, under a seven-year National Maritime Development Program started in 2005. Based on current projections, major ports are expected to handle about 800 million tons of cargo by 2014-15.
The Journal of Commerce Online
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Singapore signs FTA with Costa Rica |
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Country is 8th largest Latin American trading partner
April 7, 2010 - (SINGAPORE) Singapore and Costa Rica yesterday signed the Singapore-Costa Rica Free Trade Agreement (SCRFTA), strengthening bilateral ties between the two countries.
The agreement was signed by Costa Rica's Minister for Foreign Trade, Marco Ruiz, and Singapore's Senior Minister of State for Trade & Industry and Education, S Iswaran.
Both countries announced in December 2008 that they would negotiate a bilateral free-trade agreement (FTA). Formal negotiations started last April and concluded after four rounds.
Under the agreement, Costa Rica will eliminate customs duties for 90.6 per cent of its tariff lines, with the tariff on the remaining products to be eliminated over a period of 10 years. Singapore will grant all imports from Costa Rica immediate duty-free access.
The agreement also covers increased trade facilitation, a liberalising framework, the promotion of socio-economic development in both countries, and mutual commitment to ensure that companies from either country can compete on an equal footing with domestic suppliers for government procurement contracts, above certain thresholds. Costa Rica is Singapore's eighth largest trading partner in Latin America, with trade in 2009 valued at $413.7 million. Singapore is Costa Rica's second largest trading partner in South-east Asia, and the largest destination for Costa Rican intelligent cards and medical prostheses in the region.
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Panic as 7.8 quake hits Sumatra, Indonesia |
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April 7, 2010 - BANDA ACEH (Indonesia) - A POWERFUL 7.8-magnitude earthquake hit Indonesia's Sumatra island early on Wednesday, triggering widespread panic and tsunami warnings but causing no major damage.
The quake struck Aceh province at the northern tip of Sumatra, an area devastated by the massive Asian tsunami of 2004, and set off wave alerts for waters off Sumatra and Thailand. Four people were injured, one critically, when houses collapsed near the epicentre of the quake at Sinabang, on Simeulue Island off the northwestern coast of Sumatra, officials said.
Residents of Banda Aceh, the provincial capital, said they felt the earth shudder with frightening intensity for about a minute at around 5.15am (2215 GMT on Tuesday, 6.15am on Wednesday Singapore time). Many fled their homes or piled onto motorcycles to head inland in fear of destructive waves, but a tsunami warning issued by the Indonesian government was lifted about two hours later.
The quake struck at a depth of 46 kilometres (29 miles), according to the US Geological Survey. Indonesian geologists said the epicentre was 60 kilometres southeast of Sinabang. Electricity was down in Banda Aceh but mobile phones were working.
The people of Aceh are still traumatised by memories of Dec 26, 2004, when the Indian Ocean surged over the northern tip of Sumatra after a 9.3-magnitude quake split the seabed to the island's west.
Indonesia was the nation hardest hit, with at least 168,000 people killed out of more than 220,000 who lost their lives across the region.The Pacific Tsunami Warning Centre said sea level readings indicated a tsunami was generated in waters off Sumatra but it was not destructive. The threat was assumed to have passed two hours after the quake, although shipping and coastal structures still faced the danger of strong currents, it added.
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US ports climb out of shipping slump |
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April 6, 2010 - After suffering through their worst two-year stretch in history, ports in the US have begun climbing out of a deep hole brought on by the global economic collapse. Since January, trade volumes are up about 20 percent from 2009 - a dreadful 12 months labelled "the most difficult year in shipping history" by at least one shipping executive, the McClatchy-Tribune reported.
Gains have been buoyed by imports and exports, which saw their largest increases since 2007.
But the realities of high unemployment, massive personal debt and tight credit across America make the sustainability of recent gains highly questionable.
While solid growth may not return soon, it appears the worst is over.
Financial incentives offered by the ports, including rebates and discounts for shippers, stemmed steep declines in discretionary cargo, or freight moved to points deep in the country's interior.
Jeff Siewert, Home Depot's director of international logistics, said his company is planning to increase shipments through Long Beach as the company reconfigures distribution points throughout the country. Home Depot is one of the nation's largest importers.
But like everything port-related these days, the good news was tempered and cautious.
In 2014, upgrades to the Panama Canal will be complete, allowing large container ships from Asia to bypass Long Beach and LA en route to the Gulf or East Coast.
Wolfgang Freese, president of shipping line Hapag-Lloyd America, who called 2009 "the most difficult in shipping history", said fees and environmental regulations may also drive ocean carriers away in coming years.
"Southern California is a very expensive place for shippers," Freese said. "Cheaper alternatives have popped up."
Port officials acknowledge that cargo will divert in coming years, but are working to retain as much future growth as possible.
The twin ports are investing more than US$4.5 billion in new bridges, roadways, rail yards and terminal upgrades over the next decade, while aggressively marketing the complex to new customers.
Already, port authorities are leading the pack in an effort to capitalise on President Barack Obama's initiative to double exports within five years.
After slipping to less than a quarter of all freight handled at Long Beach-LA in recent years, exports are quickly becoming a vital slice of the trade pie in Southern California.
Buoyed by a cheap US dollar, exports of finished goods, raw materials and California produce has grown to more than 30 percent of all cargo handled locally, and port authorities hope to spur more outbound shipments through discounts to exporters and railroads serving San Pedro Bay.
Fred Malesa of railway Burlington Northern Santa Fe noted that despite competition from seaport communities in the Gulf, Canada and East Coast, ports on the West Coast will remain highly desirable for trade between Asia and the US in coming decades because of their proximity and well-established infrastructure.
"West Coast ports are the lifeblood of this nation," Malera said.
CargonewsAsia
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Asian Ocean Carriers Slashed Fleets |
March 30, 2010 - Operators reduced exposure to fragile liner shipping markets, says Alphaliner A number of Asian carriers significantly trimmed the number of containerships they own over the last 15 months as they sought to reduce exposure to the fragile liner shipping markets, according to Alphaliner.
The seven major Asian operators surveyed by Alphaliner disposed of ships with capacity of 282,000 20-foot equivalent units during the period, representing 16 percent of their combined fleet.
This includes 155,000 TEUs capacity that these carriers sold for scrap and another 127,000 TEUs capacity that was sold in the second-hand market and in financial engineering deals.
The Asian carriers were not the only carriers that trimmed their fleets. Among other major lines, CMA CGM, Mediterranean Shipping Company and Maersk Line have also taken steps to dispose of parts of their fleets, Alphaliner said. But the disposal of ships by CMA CGM and MSC were offset by the delivery of new ships and new charter hires.
For most of the Asian carriers, however, the disposals were not offset by the delivery of new ships or through charters, which resulted in a loss of market share. Also as a percentage of the total owned fleet, the Asian carriers' disposals are significantly higher.
In particular, the moves by the three Japanese carriers, NYK Line, MOL and "K" Line, to reduce their exposure to the liner trade, mark a longer-term shift in these carriers' corporate strategies to downgrade the container shipping business segments. Within the last few months, NYK and "K" Line (as well as Japanese owners related to "K" Line) sold nine over-Panamax containerships built between 1997 and 2002 of between 5,500 and 6,150 TEUs. The sales were conducted privately, at prices that were largely regarded as very attractive to the buyers.
The ships obtained strong charter backing immediately upon their sale.
In addition, MOL has been active in disposing a large part of its fleet including sending a quarter of its owned vessels for scrap over the last 15 months. The 15 MOL ships demolished, a total of 44,500 TEUs removed, were among some of the youngest ships sent for scrap last year, at an average age of 21 years. These moves have seen all three of the Japanese carriers drop in the carrier rankings, with no Japanese carrier currently represented in the top 10, a situation that is unprecedented since the Japanese carriers entered the container shipping markets in the '70s.
Another Asian carrier that has seen a drop in market share is Evergreen, which fell out of the top 4 rankings this month, the first time it is not in the top 4 carrier rank since the 1980s. Evergreen has shed 34,000 TEUs of its owned capacity during the last year, including nine of its G/GX class ships (excluding seven more that were sold on leaseback deals earlier) built between 1983 and 1988.
Evergreen remains the sole major carrier with no new ships on order on its books and has so far refrained from making moves to rebuild its fleet.
Hanjin Shipping was the carrier that had the largest shift in its owned fleet. It sold 13 container ships of between 4,000 and 5,300 TEUs in June of last year. This was part of a 16-vessel deal (including 3 bulk carriers) concluded with Korea Asset Management Corp., which paid around $383 million for 17 vessels, including one bulk carrier from Hyundai Merchant Marine, which were chartered back to the sellers for five to 10 years.
Hanjin's sale represented 39 percent of its owned containerships as the company struggles with a strained balance sheet with a debt-to-equity ratio of over 220 percent at the end of 2009.
By Peter T. Leach
The Journal of Commerce Online
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EPA Details Plans for a Long List of New TSCA Requirements |
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April 2, 2010 - EPA administrator Lisa Jackson has repeatedly made it clear that more effective chemicals management is a top priority for her administration, according to EPA officials speaking at the ACC-Socma GlobalChem conference earlier this week in Baltimore. EPA supports reform of the Toxics Substances Control Act (TSCA) but will also do everything possible within existing laws to improve federal toxics controls, officials say. EPA's enhanced chemicals management plan includes proposing new regulations for certain substances, new notification and testing requirements, as well as R&D projects aimed at identifying safe alternatives to certain toxics.
Wendy Cleland-Hamnett, EPA director for the Office of Prevention, Pesticides and Toxic Substances, detailed initiatives the agency is working on under its current TSCA authority. EPA plans a rule for restricting phthalates, due out in 2012, and will have a rule for identifying certain phthalates as "chemicals of concern" this fall, Cleland-Hamnett says. The agency is also adding six phthalates to the agency's Toxics Release Inventory reporting requirements, and will propose a notification requirements for one unspecified phthalate which is also a candidate for EPA's "Design for the Environment" (DfE) program, she says. DfE looks at the development of cost effective and safe alternatives to specific high-hazard substances.
In addition to the 12 chemicals per year targeted under "chemical action plans," the agency is working on rules to establish its "chemicals of concern list," a first-time use of a TSCA section that enables EPA to identify a chemical that may present a risk to human health. The list has no direct regulatory effect of sale of those substances in the U.S., but requires exporters to notify certain regions that they are exporting products identified as substances "of concern," Cleland-Hamnett says. That can lead to a de-selection process, where companies choose to deal with other products or ingredients, says EDF senior scientist Richard Dension. "If EPA identifies it as problematic, the market will react."
Cleland-Hamnett says EPA is also preparing a significant new use rule (SNUR) and other testing requirements for nanomaterials not currently in commerce. A SNUR for existing nanomaterials is in the works as well, due out "within the next year." EPA is also reversing its 2007 policy that held nano-scale versions of chemicals already in commerce would not be considered new substances.
The agency is working on regulations for perfluorinated compounds (PFCs), as well as for chlorinated paraffins, Cleland-Hamnett says. Also, in addition to the agency's recently announced review of potential health effects of bisphenol A (BPA), the agency is working on review of BPA's impact on the environment, Cleland-Hamnett says. Officials also may develop a DfE project for BPA. EPA is working on testing rules for certain High Production Volume chemicals that not have sponsors under the voluntary HPV testing program that EPA, EDF, and ACC developed.
Revisions to its Inventory Update Rule (IUR) requirements are due out "later this spring," which will include mandatory electronic reporting, which used to optional," and will require reporting on inorganic chemicals, Cleland-Hamnett says. EPA will also "be more careful" about what is allowed to be considered confidential business information (CBI). Cleland-Hamnett sidestepped a question from the audience about whether processors would now be required to comply with IUR requirements. "It's certainly something we've talked about and considered," she said. "More on that to come."
EPA is working to eliminate some of the remaining uses for polychlorinated biphenyls (PCBs), including liquid PCBs used for electrical installations. "We will be putting out a rule on this in the next few weeks," Cleland-Hamnett says.
ChemicalWeek
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Forecast: Retail imports rebounding |
April 6, 2010 - April import cargo volume at the nation's major retail container ports will be up 8 percent compared with the same month a year ago, according to the monthly Global Port Tracker report released Monday by the National Retail Federation and Hackett Associates.
"Retail sales are starting to improve and retailers are importing merchandise in the quantities they need to meet that demand," said Jonathan Gold, NRF vice president for supply chain and customs policy. "We expect these numbers to continue to climb as merchants and their customers move away from the recession and back toward normal shopping habits."
U.S. ports covered by Port Tracker handled 1.01 million TEUs in February, the latest month for which actual numbers are available. That was down 6 percent from January as shipping hit its traditional slow point for the year, but up 20 percent from the unusually low numbers seen during February 2009. It was also the third month in a row to show a year-over-year improvement after December broke a 28-month streak of monthly declines.
Monthly forecast volumes are:
· March, 1.02 million TEUs, a 6 percent increase over last year as spring products began to head for store shelves.
· April, 1.07 million TEUs, up 8 percent.
· May, 1.12 million TEUs, up 7 percent.
· June, 1.18 million TEU, up 17 percent.
· July, 1.24 million TEUs, up 12 percent.
· August, 1.32 million TEUs, up 15 percent.
"Port volumes have begun to rebound and we expect growth to continue going forward," said Hackett Associates founder Ben Hackett. "Retailers were maintaining lean inventories during the recession but are carefully building back up."
Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Long Angeles-Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York-New Jersey, Hampton Roads, Charleston and Savannah on the East Coast; and Houston on the Gulf Coast.
American Shipper
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UK Court Outlaws Rail Strike |
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Voting irregularities invalidate strike decision; unions vow new ballot
April 2, 2010 - (London) A court barred a walkout by nearly 6,000 signal workers in what would have been the UK's first national rail strike in 16 years.
The four-day strike, due to start on April 6, threatened to severely disrupt the movement of containers and breakbulk cargoes to and from seaports.
Network Rail, the state-owned operator of the rail infrastructure, successfully argued that there were irregularities in the RMT transport union's ballots, including votes from signal boxes that no longer exist.
The RMT and the TSSA union called off a separate four-day strike by some 16,000 maintenance workers also due to start on April 6.
The unions said they would re-ballot signalers and maintenance workers on strike action in a dispute over job cuts and changes in working practices.
Journal of Commernce
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Paper scrapped for most BIS export licenses |
April 5, 2010 - The U.S. Commerce Department's Bureau of Industry and Security issued a final rule Monday eliminating the need for most paper-based recordkeeping related to export license activities.
Effective May 5, the rule covers most export and re-export licenses, and notices covering denials of license applications, returns of license applications without action, results of classification requests, license exemption AGR (agricultural commodities) notification results, and encryption review request results.
BIS administers an export licensing program based on the country's Export Administration Regulations. As part of this program, the agency issues various documents in response to applications and notifications submitted to BIS by the shipping public.
On Dec. 4, BIS issued a proposed rule that would allow it to eliminate the paper version of the license-related documents that it issues both electronically in the Simplified Network Application Processing Redesign system (SNAP-R) and on paper.
"BIS has been expending funds and staff to mail to certain parties information that is entirely duplicative of information that BIS sends to those same parties electronically," the agency said. "The changes in this rule will help BIS to reduce its operating costs and free the staff time that otherwise would be devoted to mailing paper documents to be used for other purposes."
BIS estimates that in recent years it has spent about $25,000 annually in direct mailing costs (envelopes, supplies and postage) to send out paper copies of licenses, responses to classification and encryption review requests, and license exemption AGR notifications.
American Shipper Back to the top |
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Containers pile up as lines skip India on way to Europe |
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Shippers suffer as box carriers seek higher returns from Asia
April 1, 2010 - Indian exporters and western apparel retailers are facing a congestion nightmare as containers pile up at India's ports and container shipping lines operating out of Asia give the country a wide berth en route to Europe.
Grant Liddell, key account director at leading UK logistics provider Uniserve, said trade out of India was prone to severe delays.
"It is exactly like the situation was out of China in November, when it was really difficult to get space on vessels to Europe and air freight was also suffering massive congestion," he said.
"Once again we are seeing congestion of the two combining, following the reduction of capacity by both shipping lines and airlines."
Western India Shippers' Association vice-president K Venkatesh said the situation was likely to get worse before it gets better.
"At a conservative estimate, there are between 20,000 and 35,000 boxes lying around India at the moment, especially in the arc between Nhava Sheva and Tuticorin, and the lines have not so far been able to clear this backlog," he said.
A spokesman for Swiss forwarder Panalpina said: "Following the financial troubles a lot of ocean carriers are now reluctant to increase capacity on the one hand, and, of course, they also want to keep up or increase the rate level on the other."
Weekly capacity out of India is between 10,000teu and 12,000teu of container slots. "On that basis, it will take at least three weeks to clear the backlog," Venkatesh said.
"There has been an artificial capacity situation created by the lines. If you want to get cargo out of the south Indian ports you either pay a premium or you will not get the space."
He said that Maersk had withdrawn its call at Tuticorin and a call at Nhava Sheva on a Mediterranean service, while CMA CGM has also withdrawn capacity from India.
"If we lose one service that goes to the Mediterranean, that cargo has to be feedered from northern Europe. The premium to get the cargo from India to northern Europe is $150-$200 per teu, but if you are talking about Alexandria, it is $500," he said.
Steve Walker, chairman of UK forwarder SBS Worldwide, said: "Most of our consignments are less than container load, which are co-loaded and typically the freight all kinds rate is higher than the volume discounted rates of the major retail customers and thus is higher on the shipping lines priority list."
In broad terms, rates between India and Europe are understood to have increased sharply, from around $1,000 per teu to $3,000 per teu.
Liddell added: "What is surprising is that while the rates from the Far East have always been subject to fluctuations, the Indian trade was generally much more stable. Previously a lot of carriers who were dropping off boxes from the Far East in India were then chasing to fill the slots from India to Europe."
While the main reason for the backlog was the reduction in shipping capacity out of the Indian sub-continent, questions remains as to whether this would ease in the near future.
"There seems to be no thought process about adding more capacity," Venkatesh added. "This capacity crunch will last until late in the year unless someone new comes along and adds capacity."
Even if more capacity is added, no container line customer expects prices to decline, however.
The Panalpina spokesman said: "By the end of April, there should be enough capacity available, but we do not expect the rates to go down."
And Walker cautioned: "There was a rate increase on March 1, which everyone paid, and another in mid-April, which also looks positive."
But Venkatesh argued carriers should take a longer-term view: "The carriers are only going to hurt themselves. They should have talked to us - you do not buy a shotgun to kill a rat."
International Freight Weekly
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Argentine Port Strike Settled |
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Critics should focus on access to China's market that pact provides: Pangestu
April 6, 2010 - Port workers and major grain and oilseed exporters in Argentina reached a deal last week to end the widespread strike that has blocked agricultural exports in recent days.
"An agreement has been reached despite the hard-line stances by both sides," says Hugo Moyano, a prominent trucking union leader who worked with port workers, government and business officials to help broker the deal.
Word of the deal helped send 2009 crop soybean futures contracts on Chicago Board of Trade plunging March 31.
The strike, which started the last full week of March, had brought Argentina's soybean exports to a virtual halt, spurring concerns about near-term supplies. Port workers began blocking access to two port complexes near Rosario, Argentina's main export hub, but on March 29, the protests were widened to cover nearly all port complexes in the area.
Truck drivers who were frustrated over the strike, which had thousands of rigs lined up outside of ports, also started their own protests on Monday.
Port workers reportedly settled for a 27% salary hike for 2010 in dollar terms. Port workers in Santa Fe Province had demanded a 30% wage increase as measured in U.S. dollars, an official at the province's Production Ministry told Dow Jones Newswires. While companies employing the workers had offered a 25% salary increase as measured in Argentine pesos, the official said.
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