May 7, 2010 - Container shipments from Asia to Europe surged 20 percent in the first quarter from a year ago as the rebound in traffic that started in the final three months of 2009 continued into 2010, according to latest industry figures.

 

First quarter shipments rose 3.2 percent from the previous three-month period, according to the European Liner Affairs Association.
Growth slowed to 10.5 percent in March after a 53.5 percent surge in February that reflected the steep slump in traffic in the opening weeks of 2009.

 

Carriers transported 3.1 million 20-foot equivalent units from Asia to Europe in the first quarter, compared with 2.59 million TEUs in the same period in 2009, the Brussels-based industry group said.

 

The year-over-year growth in traffic on the return leg from Europe to Asia slowed to 9.9 percent in March from more than 25 percent in February and more than 34 percent in January to total 1.36 million TEUs in the first quarter against 1.12 million TEUs a year ago.

 

The previously sluggish North Atlantic trade registered growth in both directions led by shipments to Europe that rose by just over 14 percent in the first quarter to 687,200 TEUs. Westbound traffic out of Europe grew almost 11 percent to 722,000 TEUs.  

 

By Bruce Barnard

May 12, 2010  - ThSouth Africa's three main ports are at a standstill as strikes by transport workers threaten to jeopardise the World Cup. 

Today, members of the United Transport and Allied Trade Union (UTATU) joined a strike by the South African Transport and Allied Workers Union (SATAWU) over what they claim are insufficient pay increases by state-controlled port operator Transnet. 

Speaking to IFW on the third day of of the strike, UTATU general secretary Chris De Vos said: "The biggest concern is the soccer World Cup, because there is a lot of equipment and cargo in containers that needs to be imported now. 

"The three big ports of Richard's Bay, Durban and Cape Town are vastly impacted and most of the operators [at smaller ports] have been bought to a halt." 

African specialist Safmarine told IFW the delays caused by the strike were affecting the country's entire supply chain. 

South Africa corporate affairs executive Fred Jacobs said: "A special team has been set up to make alternative plans for shortsea cargo and to decide which vessels will have to omit port calls or continue to wait for a berth. 

"Our options are limited as there are few transhipment options serving this region."

Transnet said it was trying to minimise the impact of the strikes by redeploying resources to critically needed areas and prioritising the movement of key commodities. 

De Vos said that some rail freight services operated by Transnet were also affected, but many were still running. 

Together the two unions represent 41,000 out of Transaid's 49,000 workers, but not all are on strike. 

De Vos warned that there was no end in sight and that the strikes were "starting to turn ugly". 

Non-striking workers are being intimidated and there is a suspicion that a derailed train today may have been the result of sabotage. 

Transnet's offer of an 11% increase in wages, which De Vos felt was a fair offer with inflation at around 5%, was rejected by members of both unions. 

De Vos said no talks with Transnet were planned but UTATU was available for discussions. 

Transnet has condemned the industrial action and violence, which yesterday led to arrest of 13 protesters.

 

May 3, 2010 -- Shippers should expect trucking rates to rise as motor carriers capitalize on a relative shortage of capacity caused by a range of factors from the 2009 demand downturn, according to a note from the consultancy IHS Global Insight.

 

"Capacity in the motor carrier segment has decreased from its overabundance of a few years ago," said Charles W. Clowdis Jr., managing director of transportation advisory services for IHS Global Insight. "To provide increased capacity as the economy recovers, rate increases are a certainty. Ample capacity will be required to enable suppliers to ship to factories that in turn ship to customers and distribution centers."

 

Clowdis explained that the 2009 crisis thinned the herd of a fragmented trucking industry.

 

"Many carriers have exited the market during the economic downturn due to declining tonnage and shipments, as well as heavy debt service demand," Clowdis wrote. "Owner-operators, those still in the marketplace, will also offer less capacity as the economy recovers. It is also extremely likely that a repeat of the driver shortage will return and intensify as drivers turn instead to construction and other jobs as the economy recovers. Higher pay for drivers will also necessitate rate hikes."

 

Environmental and debt servicing pressures will also drive up rates, Clowdis said.

 

"Many carriers, both truckload and less-than truckload, have not replaced their fleets on a schedule that puts the most fuel-efficient equipment requiring less maintenance into service," he said. "In effect, carriers must increase their margins to at least 8 percent. Those carriers that have held their rate levels stable will also be pressured as their competitors offer increased capacity to the market.

 

"Rates will also be driven upward by the need to service debt incurred by many of the carriers that resorted to borrowing to sustain themselves during the downturn, some at high interest rates.    Shareholders that have been patient will also expect improvement in share prices and dividends driven by better earnings. These demands must be met through increased rate levels."

 

For the first time in five years, motor carriers may be in a position of strength rather than shippers.

 

"Since 2006, the rate levels in the transportation marketplace have favored the buyer of transport service," he said. "More capacity pursued less available freight as the economy retracted. As capacity decreases and becomes more valuable to serve the released consumer demand, carriers will become more aggressive in seeking rate increases. Increases in the 7-10 percent range have already been signaled by the industry. While carriers have learned important cost-reducing lessons in the downturn, increased capacity has enabled many of these. As freight tonnages increase, many of those savings will disappear.".

 

May 12, 2010 - New U.S. Customs and Border Protection Commissioner Alan Bersin on Tuesday proposed a "grand bargain" by which importers would share more detailed information about their trade partners and shipments in exchange for much faster clearance of their goods and guarantees of data protection.

   Bersin, speaking in Philadelphia at a meeting of the Commercial Operations Advisory Committee, articulated his vision for border security and trade promotion strategies that complement each other, with a heavy reliance on risk management and expedited clearance for trusted shippers and travelers.

   "We need to reinvent our security regime," he said.

   It was his first opportunity to personally address the 20 members of the private sector body since taking office two months ago and repeat previous statements before Congress and elsewhere that he wants to design security programs that don't harm commerce.

   The former Southwest border coordinator for the Department of Homeland Security acknowledged to reporters during a break that risk management, layered security and separating low-risk and known traffic from that which is high-risk or unknown are not new concepts, but that he intended to develop more robust protocols to realize their full potential.

   "We need to implement it in practice to a much greater scale and with much greater fidelity to the end point of expediting lawful traffic and seizing unlawful and dangerous traffic.

   "The determination to have it contributed to by the private sector, by the trade community, have it adopted and have it implemented to much greater effect and benefit is the novel dimension," Bersin said.

   His statement carried overtones to former CBP Commissioner Robert Bonner's so-called Green Lane under which shippers that demonstrate their supply chain security practices meet high standards get a virtual free pass to avoid inspections.

   CBP officials have stressed since 9/11 that their twin missions are border security and trade facilitation, although many importers and exporters say security requirements still trump efforts to simplify Customs clearance and compliance procedures. Importers in the highest tier of the voluntary trusted trade program known as the Customs-Trade Partnership Against Terrorism complain that they still do not receive sufficient tangible benefits to justify the expenditure of resources required to participate.

   Bersin told Congress last month that he wants to build on trusted trader and traveler programs such as FAST, SENTRI, NEXUS and Global Entry.

   The Free and Secure Trade program offers expedited clearance for carriers and shippers enrolled in C-TPAT by reducing the amount of documentation required at crossing, providing dedicating lanes to FAST participants and reducing inspection levels. Under the program, drivers must be pre-vetted as low-risk through a review of their identification and citizenship documents.

   SENTRI and NEXUS are southern and northern border programs, respectively, that allow registered travelers to speed through border checkpoints and Global Entry offers the same benefit at airports for international travelers.

   The implication of his philosophy, Bersin said Tuesday, is that CBP can't increase security measures unless it does a better job of segmenting traffic by risk.

   "We're trying to find a needle in a haystack. There are two ways to do that. One, we can use very pinpointed intelligence to reach into the haystack. Or, you can blow a lot of the hay away from the haystack to make it easier to find the needle," he said.

   The critical piece to using risk management instead of blunt inspection tools at the border is advance information, he said.

   "If you share information with us about your supply chain -- with whom you do business, what's shipped, whom you trade with, and who you let do business on your behalf and other information we may require -- to establish you as a trusted shipper, then we have two reciprocal obligations: To use that information appropriately and protect its confidentiality for competitive reasons as well as institutional proprietary reasons and to facilitate the movement of your goods across physical boundaries.

   "This is the bargain that I propose to the private sector" to enhance security and economic competitiveness at the same time, Bersin said.

   CBP in the future intends to extend the offer to foreign companies and nations "to permit us to do our inspections and segmentation as far away geographically and as early in time as we can from the arrival," he added.

   Left unsaid was whether the new Importer Security Filing, or "10+2' rule, still does not provide enough detailed transactional data about imports. The rule requires importers to provide 10 pieces of information about its supplier, container stuffing location, cargo contents and consignee 24 hours prior to vessel loading in a foreign port. It was implemented because ocean carrier manifest information is very vague for targeting purposes.

   Asked during the break what extra information the trade community could still provide, Bersin said, "There's a fair amount that could be disclosed earlier in the process."

   Pointing to the container manifest as an example, he said, "The first information we get is fairly sketchy. It gets more specific as the container comes closer to the American shore. It seems to me that with the confidence that that information would be protected, there could be a lot more instructive statement about what's in the container which would permit much more targeted judgments about exactly what kind of achievements could be gotten, on top of C-TPAT treatment.

   "What we need to do is get more people into the most expedited tier of the program, and that necessarily involves knowing more about not only the shipper but the shipment."

   The Container Security Initiative, the Secure Freight Initiative and C-TPAT are all due "for a relook and a renewal of purpose, and multiplication of the original promise.

   "That's not to say these programs haven't served well. They have," but CBP needs to develop more flexible inspection arrangements and evaluate the mix of technology, personnel and overseas partnerships "to see whether or not we can rebalance that to get a more effective and efficient result," Bersin said.

   To demonstrate his seriousness about achieving quick trade facilitation results, Bersin announced that CBP has taken concrete steps to significantly shorten the amount of time it takes for a customs broker to obtain his or her license after passing the broker exam.