 | Commerce Secretary Outlines Export Control Changes |
Department streamlining lists of goods to promote security, economy
September 1, 2010 - The Obama administration is taking the first steps toward creating a new export control system that will guard sensitive technology needed for national security while facilitating the exports of less-vital technology from U.S. manufacturers, said Commerce Secretary Gary Locke on Tuesday.
"We must have an export control system that can ensure both national security and economic prosperity. Yet, while we currently have one of the world's most stringent export control systems - it's not necessarily the world's most effective and efficient," Locke told an audience of more than 1,000 at the Bureau of Industry and Security's annual export controls update conference.
The administration is streamlining the U.S. Munitions List administered by the State Department and the BIS Commerce Control List, Locke said. Before the two are merged into a single list, the government will create "bright lines" between them to give exporters a clear picture of which agency controls the licensing of a particular product.
Commerce officials said Tuesday they expect to complete the merger by the end of 2011. While the administration is taking the steps it can, it must turn to Congress for legislating major changes, Locke said, such as the creation of a single agency to administer the export control list or the transfer of enforcement to U.S. Customs and Immigration.
"It is important to ensure that our licensing criteria are based on objective technical parameters that take into account the strategic nature of an item and whether or not the item is available from non-U.S. suppliers," Locke said. He said that U.S. export restrictions already are putting U.S. technology companies at a competitive disadvantage in the world marketplace.
Journal of Commerce
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| Reach: Eleven New Substances Proposed for ECHA Candidate List
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August 31, 2010 - European Union member states Austria, Germany, and the Netherlands have proposed that 11 chemicals should be classified as Substances of Very High Concern (SVHC) and become candidates for Reach authorization. The substances have been proposed because of their potentially serious effects on human health or the environment. Stakeholders have until October 14 of this year to comment on the proposals.
The 11 substances are 1,2,3-trichlorobenzene; 1,2,4-trichlorobenzene; 1,3,5-trichlorobenzene; cobalt (II) sulfate; cobalt (II) dinitrate; cobalt (II) carbonate; cobalt(II) diacetate; 2-Methoxyethanol; 2-Ethoxyethanol; chromium trioxide; and acids generated from chromium trioxide and their oligomers.
Already, 38 substances feature on the candidate list. Under the rules of the authorization phase of the Reach program, the listed substances could be controlled or banned from the market. Details of the proposals are available on the European Chemicals Agency's (ECHA; Helsinki) website.
Inclusion of the substances in the candidate list would mean that suppliers of mixtures and articles containing the substances would have to provide additional safety information.
Stakeholders' comments should focus primarily on the hazardous properties that qualify the chemicals as SVHCs, ECHA says. Additionally, interested parties can provide comments and further information on the uses, exposures and availability of safer alternative substances or techniques. "They should be aware that these aspects will mainly be considered at the authorisation phase - the next stage of the process, which includes a new round of public consultation," ECHA adds.
Chemical Week
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| Out-of-service charge shocks shippers |
August 30, 2010 - Some of the world's leading container shipping lines have started slapping on shippers out-of-service charge in respect of damaged equipment, much to the dismay of the shippers who feel that it is yet another stealth charge being imposed due to dwindling profits of the lines, reported The Hindu.
There have been cases where the shipping lines claiming damage drew a blank when proved that the damage to containers was not caused by the shippers concerned. The wear and tear might happen due to various reasons. For instance, it is possible that it happened possibly years ago and never been flagged before.
It is also possible that the damage might have been caused when the empties were moved from one port to another; or even when the boxes were under care of shipping lines or ports.
Since most lines sub-contract the depot service to depot operators, there is also a chance that the "blackmail" is from the depot operators, presumably in connivance with the lines.
Cargonews Asia
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Congestion at Indonesian ports worsen | |
August 30, 2010 - Congestion at three international seaports in Indonesia have become worse following a surge in goods shipment ahead of Idul Fitri 2010 and an increase in import flow, reported Bisnis Indonesia.
The container capacity has been unable to accommodate surging flow of goods at the ports of Pontianak, Banjarmasin and Belawan.
"Congestion at the three ports is getting worse," said co-chairperson for container transportation at the Indonesian National Shipowners' Association (INSA) Asmari Herry.
According to him, ships at the three ports had to wait for five to seven days to get docking services. In Belawan, the congestion was attributable to damaged equipment and surging flow of imported goods.
He explained the frequency of ships serving Banjarmasin port surged significantly since demand for goods shipment jumped by 15 to 20 percent, ahead of Idul Fitri.
The same situation also happened in Pontianak. "Damaged equipment and poor piling yard capacity exacerbate the situation, creating high-cost economy."
The INSA suggested Pelindo take swift actions by bolstering the piling capacity at the three seaports. "Otherwise, the cost will be higher, affecting goods prices."
Last week, at least six container vessels carrying staple goods had been queuing for seven days, waiting for docking services at Pontianak port. However, state port operator Pelindo II early this week said it would relocate empty containers massively.
Solikhin, general manager of Pontianak-branch PT Pelindo II, stated the company had to rent one hectare of area located around 500m from the port to accommodate empty containers, which took up more than 50 percent of the total capacity.
According to him, the congestion was attributable to an increase in container flow and to project works.
On the other hand, the volume of imported containers that have to undergo physical inspections by the local Custom and Excise office at Tanjung Priok Port is still high due to a surge in import activities since the fasting month.
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Sumatra volcano erupts two days in a row | |
August 31, 2010 - An Indonesian volcano that had been dormant for more than four centuries erupted for the second day in a row yesterday, spewing towering clouds of ash and forcing the evacuation of more than 21,000 people.
Some airplanes had to be diverted because of poor visibility.
Villagers living along the slopes of Mount Sinabung in North Sumatra province have packed up their belongings and headed to emergency shelters, mosques and churches, said Andi Arief, a presidential adviser on disasters.
Their abandoned homes and crops were blanketed in heavy, grey soot, and the air was thick with the smell of sulphur.
Mount Sinabung last erupted in 1600, so observers don't know its eruption pattern and are monitoring it closely for more activity.
They raised the volcano's alert to the highest level after its first blast on Sunday, which followed days of rumbling.
'The problem is, we really have no idea what to expect,' said Surono, a government volcanologist who uses only one name. 'We don't know what set it off, how long it will continue or whether we should expect pyroclastic flows.'
So far, 21,000 people have been evacuated, said Arief, and food, emergency tents and medicine were on the way to the scene. The government also has set up public kitchens for refugees and handed out more than 17,000 respiratory masks.
Several domestic flights from the provincial capital of Medan had to be diverted, according to Bambang Ervan, spokesman for the Transportation Ministry.
Indonesia, the world's largest archipelago, is on the so-called 'Ring of Fire', an arc of volcanos and fault lines encircling the Pacific Basin.
Associated Press
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Five years later, US chems use lessons learned from Katrina | |
August 27, 2010 - The US chemical industry has drafted studies, learned lessons and taken action since Hurricane Katrina struck nearly five years ago, leaving it in much better shape for the next time a storm strikes, sources said on Friday.
On the morning of 29 August 2005, Katrina roared ashore near the Louisiana-Mississippi border with 125 mile/hour (200 km/hour) winds.
The storm pummelled offshore and coastal energy sites in the region, disrupting production for weeks and, in some cases, months.
Louisiana Chemical Association (LCA) president Dan Borne described the ordeal as critical for the chemical industry, but said he was pleased with the overall response.
"Our chemical plants that were in harm's way deserve a lot of credit for taking their operations down, riding out the storms and restarting them without any environmental incidents, fatalities or major injuries to personnel," he said.
Winds from the storm battered the New Orleans area, eventually pushing water from Lake Pontchartrain toward the city, toppling levees and causing massive flooding to about 80% of the city.
Overall, about 1,800 people died during Katrina and more than 1m were displaced from their homes. Total damages and costs from the storm were about $125bn (€99bn).
In response, Louisiana State University (LSU) teamed with several public, private and academic groups in the state to create a Business Emergency Operations Center (BEOC).
The LCA is included in the panel for the centre, which opened this year and should serve as a major advance for emergency planning, management and response for industries throughout the state, Borne said.
For chemical companies in particular, the most critical emergency issues during Katrina were not wind and water damage to the plants themselves, but instead logistics and communication as the region dealt with catastrophic effects.
Less than a month after Katrina struck southeast Louisiana, Hurricane Rita hit the extreme southwest Louisiana with winds of 115 miles/hour. Both storms were considered major hurricanes and struck at the heart of the US petrochemical industry.
While not all inland plants suffered significant damage, effects from power and natural gas outages as well as closed and flooded roads were widespread following the storms.
As such, regional producers made changes to hurricane season practices that remain in effect in 2010. The LCA published a "Lessons Learned" study on the 2005 season, in which local producers noted the changes they would make.
"Know that the outside infrastructure will not recover as quickly as the plant, so modify plant procedures to work around the obstacles," one producer said.
Other producers argued for diversity in shipping services as well as natural gas suppliers, to reduce odds of having supply completely cut off.
"Seek immediate waivers on highway size and weight load restrictions if rail and/or waterborne commerce is interrupted, and if what you ship can be transshipped by truck rather than by train or water," a producer said.
"If you have only one natural gas pipe coming into the plant, you could be curtailed or completely cut off," said another producer. "Prudent planning argues for more than one natural gas supplier having a pipe into your plant."
Such concerns have already been tested for Gulf producers in 2010. The BP oil spill off the Louisiana coast prompted fears that barge shipments could be disrupted, forcing companies to find alternative shipping.
Even at present, Borne said the oil spill cleanup meant that emergency services available during prior storms might not be as accessible.
Offshore, the American Petroleum Institute (API) said the 2005 season helped scientists discover that the central Gulf was more prone to hurricanes because it acts as a gathering spot for warm currents that can strengthen a storm.
As such, the API altered its recommended practices for offshore operations, including locating jack-up rigs on more stable areas of the sea floor and positioning platform decks higher above the sea surface.
Aside from logistics and plant practices, producers also cited basic employee communication as a priority, with downed phone lines posing problems following Katrina and Rita.
Several producers said they had secured additional satellite phones, while others bought cell phones with non-local area codes, according to the LCA.
The LCA noted that text messaging was successful in some instances, leading some chemical companies to turn to written plans. A copule companies designed hurricane-related feeds on Twitter in 2009 - following 2008's Hurricane Ike - to more quickly spread information.
Those methods could be tested in the not-too-distant future. Hurricane Danielle and Tropical Storm Earl remain active in the Atlantic, while a tropical wave to the southeast of Earl appears likely to develop into Tropical Storm Fiona by Saturday, according to the US National Hurricane Center.
The 2010 Atlantic hurricane season lasts through 30 November, with the period from mid-August until early October as its peak. Meteorologists are predicting an above average storm season.
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Ports to receive new protocols | |
August 29, 2010 - Major ports and the state maritime boards will be issued new guidelines to ensure hazardous chemical goods are safely handled.
This has risen after the 12th meeting of the Maritime States Development Council (MSDC) which discussed the prevention and handling of environmental hazards near the ports.
It is also after the collision of two merchant ships at the Mumbai port and reports of open storage of harmful cargo near the ports, The Hindu reports.
G.K. Vasan, union minister of shipping says the maritime States will prepare an oil spill contingency plan so as to prepare all ports to address both major and minor oil spills.
The council has decided on installing Vessel Traffic Management System (VTMS) in non-major ports, and will draft out a policy on coastal shipping in close consultation with the States. This will give sufficient incentives and facilitate paperless transaction to enhance efficient port operations, Vasan explains.
Procurement Asia
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Drewry: Terminal operators 'weather storm' | |
August 31, 2010 - Global container terminal operators had their "toughest year ever" in 2009, said Drewry Shipping Consultants.
But in a few years terminals may once again face a capacity crunch, the London-based consultants said in a summary of its Annual Review of Global Container Terminal Operators 2010.
"Global economic trends meant that container throughput at the world's ports fell for the first time ever, from 524 million TEUs in 2008 to 473 million TEUs in 2009, a drop of almost 10 percent. Emerging markets were generally less hard hit than the mature markets. Volumes in North America and Europe fell by around 15 percent but in the Middle East and Africa the downturn was hardly felt," Drewry said. The sharpest decline was in Eastern Europe where container volumes fell more than 35 percent.
While worldwide volumes fell 10 percent in 2009, the volume handled by the 22 international container terminal operators (as apportioned by their equity interest in terminals) was only 7.5 percent lower, Drewry said.
"2009 was a year the like of which has never been seen before," said Neil Davidson, senior advisor, ports for Drewry. "Historically, for global terminal operators, it has always been about expanding and adding capacity as quickly as possible. Then, suddenly, they were all faced with changing their mindset towards drastic cost control and halting of projects.
"It is a tribute to the resilience of the industry that, although volumes and revenues were well down, all of the major terminal operators managed to more or less maintain their EBITDA (earnings before interest, taxes, depreciation, and amortization) margins in percentage terms in 2009. Without question the global terminal operators weathered the storm," he said.
With economic prospects now brighter, Drewry said "container throughput is projected to increase globally by an average of 7.2 percent a year between 2009 and 2015. As a result, global container port volumes are forecast to rise by 245 million TEU, from 473 million TEUs to 718 million TEUs, an increase of just over 50 percent in this period." That rate is below the double-digit growth rates seen in the early part of the 2000.
But Drewry noted the capacity of the world's container terminals is forecast to grow by just 143 million TEUs during 2009-2015, a rise of just under 20 percent.
"The much slower rate of container terminal capacity growth relative to throughput will inevitably increase global container terminal utilization rates unless more projects are brought back to life," it said. "Several parts of the world could see the specter of congestion returning by 2015 if some of the originally planned expansion projects cannot be reactivated within the next three to five years."
Drewry said PSA, which is owned by the government of Singapore's Temasek Holdings, is the market leader by equity TEU, followed by HPH. PSA's owns 20 percent shareholding of HPH.
It said DP World moved ahead of APM Terminals into third, while COSCO remains a more distant fifth.
"All shipping lines with container terminal portfolios have, surprisingly, kept these intact. Suggestions that such operators might need to sell off terminal assets as a result of financial problems affecting the core liner shipping business have proved unfounded -- a remarkable achievement given the massive losses incurred by parent shipping line groups in 2009," Drewry said.
Terminal owners and operators are generally reviewing their portfolios and may seek disposals or acquisitions to adjust their balances, Drewry said.
"There remains the question of valuations for ports and terminals in the 'new world' with the heady heights of 20-25 times EBITDA now gone, perhaps forever. Anecdotal evidence about what the new benchmark is suggests 8-10 times EBITDA is more realistic, but there have been a limited number of transactions since the global economic crisis took hold," Drewry noted. But "many investors remain interested in the port sector and could now benefit from significantly lower prices for acquiring assets."
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| India's cabotage rules stifle container port growth | |
August 29, 2010 - Shipping lines are claiming that India's restrictions on coastal shipping are preventing the development of container hub ports that could take the strain off the country's creaking gateway ports where capacity is scarce. Its cabotage laws, similar to those in Malaysia, do not allow foreign-flagged ships to carry cargo between one Indian port and another.
Traditionally, Indian trade with the Far East, Europe and the US has been transhipped via Colombo in Sri Lanka, Singapore or Port Klang in Malaysia, but India would like its own ports to handle more of this cargo. Facilities at Nava Sheva, Mundra and Chennai have been promoted as gateway ports with the new Cochin facility expected to compete for transhipment traffic.
Supply Chain Asia |
| Competition heating up for Changi Airport Cargo |
August 29, 2010 - . Singapore Changi Airport handled 158,000 metric tons of cargo in July. The 11.8 percent improvement over July a year ago is the smallest increase so far this year as growth seems to be flattening out. However, tonnage volumes and year-on-year growth figures at Changi have been far less dramatic than at Hong Kong International Airport (HKIA), its fiercest regional rival. HKIA saw cargo throughput climb 24.5% year-on-year to 363,000 tons in July and in the first seven months of the year, cargo throughput was up 33.3% to 2.3 million tons on the previous year.
Supply Chain Asia
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| Sourcing may see new players | |
August 25, 2010 -China and India remain the top low-sourcing options in Asia but are expected to face competition by Indonesia and other new players in the region.
Sharul Nizam, head of group procurement at Time Dot Com Berhad says, "If we look at as Asia perspective, for the next five years I foresee there will be a new country emerging as an alternative to both countries." He cites the country to be Indonesia.
However, he does not expect too many changes in the procurement environment throughout Asia.
"The rising cost of delivered goods or freight cost will continuously give pressure to the total cost and this is very much related to the oil price," he feels.
That said, Nizam believes geographical proximity will be the ultimate factor for outsourcing. He feels Asia will be less of a focus for US companies as they turn to Mexico - a closer alternative.
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Derivatives to stabilise container market | |
Traders argue against shipping line claims that long-term contracts are the only way to bring long-term stability
September 1, 2010 - Container derivatives experts have hit back at shipping line claims that the fledgling market could exert a destabilising effect on the container transport industry.
Arthur Worsley, Container Swaps Broker at Freight Investor Services (FIS), said that carrier claims that derivatives would destabilise the market and that carriers should sign long-term contracts in order to bring stability to the industry was not always true.
Worsley pointed out that if carriers sold slots on a service at the wrong price on a long-term contract, they could lose money and face having to break the contract with its customer.
And the same applied to shippers if they signed up to a long-term contract at the wrong price.
This would have the affect of damaging customer/supplier relationship, an example of which recently hit the headlines when it emerged that UK retailer Argos is taking Maersk Line to court for allegedly reneging on contracts.
Worsley said: "A poorly managed contract can quickly jeopardise even the longest of carrier-shipper relationships.
"At risk are the cost, time and effort placed in developing the client-supplier relationship and mounting tensions between carrier and shipper.
"In a worst-case scenario, the carrier may lose a good customer as well as guaranteed volume and revenue.
"The customer may find themselves in the daunting position of searching for a new carrier, losing relationship-specific service benefits and reduced costs that may have been earned or negotiated over several years."
Container derivatives, or swaps, where someone buys space on a paper market at a different price to the amount you paid on the physical market, would help elevate this risk.
Worsley said that a carrier losing money on a contract had four choices:
· It can default on the contract and risk losing the customer to another line
· Renegotiate the annual rate and risk losing the customer to another line
· Introduce a surcharge but risking upsetting its customer
· Or, honour the contract and buy container swaps contracts in order to hedge against the risk of increase in spot market box-rates.
Last week, Maersk Line CEO Eivind Kolding told IFW's sister publication Lloyd's List that a paper market would damage the container trades by exacerbating price swings.
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Kochi port tariff hike hits ship operators | |
September 1, 2010 - The shipping community in Kochi is keeping its fingers crossed over the recent hike in tariff at Kochi port, which has pushed prices beyond those at ports in the neighbourhood as well as other major ports in the country, reported The Hindu.
Sources in the shipping circles here pointed out that the Kochi port is charging US$9,994 to handle a vessel of 5,000 GRT for a five-day stay in the port whereas the rates at Tuticorin, Mangalore and Kandla are $3,511, $3,675 and $4,950, respectively.
The hike in tariffs, which included port dues, pilotage and berth hire, had also resulted in low arrivals of cargo other than containers at the port in the last few months.
According to sources, traditional cargo of fertilisers is also being drawn to Tuticorin port due to cost factors, including port and labour charges. Several public sector companies in the State are understood to have shifted a major portion of movement of raw materials to Tuticorin, from where it is bagged and brought back to Kochi by rail.
Besides, the cost of crane is also included in the berth hire in all ports, unlike at Kochi. Moreover, Kochi port has also decided to withdraw from service all shore cranes at Mattanchery and Ernakulam wharves following the directive issued by the Inspectorate Dock Safety due to poor maintenance of machines.
The port had asked the shipping operators to make alternate arrangements for cargo handling operations. This is also affecting the productivity of the port, the sources said.
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Euro road freight rates rise to pre-recession levels | |
August 25, 2010 - European consultancy Capgemini Consulting and TRANSPOREON have published the latest edition of their Transport Market Monitor, a quarterly publication, outlining developments in European road transport rates and capacity. The indices in the report are based on an electronic trading platform, which handles a yearly transport volume of more than €2 billion.
The headline results showed that transport prices increased in Q2 2010 to index 100.9 a rise of 13.5% compared to Q1 2010, and that for the first time, price levels equalled the levels of the pre-crisis period H1 2008. However they are still 2.2 % below the second quarter 2008.
The report asserted that the significant drop in available capacity was without doubt one of the main drivers for the price increase: the available capacity index decreased by 44% when comparing Q2 2010 with Q1 2010. The Q2 capacity index figure of 61.3 is the lowest level that has been measured since January 2008. Although fuel and labour costs have also increased since Q1, their impact is relatively less.
The authors of the report believe that the drop in available capacity was due to increased demand for transportation caused by the positive economic trend and a clear seasonal pattern. A third factor may be that the modal choice trends changed during the economic downturn. The authors believe that shippers may have switched volumes on to road, due to competitive pricing, resulting in additional demand.
On the supply side carriers reduced their fleets significantly during the recession, and have yet to re-invest in new capacity to any major extent. The authors point to modest sales of new trucks, showing that confidence has yet to fully return to the market.
However it is unclear whether the price index will remain above the index 100 mark during H2 2010. The authors say that that prices may have peaked in Q2 2010 due to market dynamics: demand and capacity might be better aligned in the second part of this year. However, input cost levels are expected to become more of an issue both for diesel and labour, with the latter being affected by a shortage of skilled workers.
Transportation Intelligence
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Judge Rules LA Port Clean Trucks Plan Can Proceed | |
Ruling could lead to harbor trucker unionization
August 27, 2010 - A federal judge late Thursday rejected trucking industry arguments that parts of the Port of Los Angeles Clean Truck Programs violate federal law and said controversial provisions affecting drivers and services can go forward.
The ruling, which is certain to send shock waves throughout the trucking industry because it could lead to the unionization of harbor truckers, will most likely be appealed by the American Trucking Associations, the plaintiff in the two-year-old case.
U.S. District Court Judge Christina A. Snyder ruled although federal preemption law prohibits state and local entities from regulating the rates, routes and services of motor carriers engaged in interstate commerce, the Port of Los Angeles can mandate certain requirements on truckers under a "market participant" exception to that law.
The Los Angeles judge said the port, in order to expand and protect its assets in competition with other ports, must promote a healthy harbor trucking industry and one that reduces pollution. Otherwise, environmental and community groups, which had blocked port expansion dating back to 2001, would continue to block port growth through litigation.
She determined the port adopted the concession agreement in the Clean Truck Program "as a business necessity," and therefore the concession requirements fall under the market participant exception to the motor carrier provision of the Federal Aviation Administration Authorization Act.
Also, the port subsidized the purchase of dozens of costly new clean trucks. The port argued that the employee-driver mandate conserves the administrative costs of the Clean Truck Program and protects the port's investment in clean trucks by encouraging financially-stable motor carriers to work in the harbor.
The Teamsters union has supported the city and port in the litigation that started in Judge Snyder's Court when the ATA filed suit in July 2008.
By mandating that harbor truckers hire truckers as employees, rather than allowing motor carriers to contract with independent owner-operator drivers, the port will make it easier for the Teamsters to organize the drivers. Unions, by law, cannot organize independent contractors, but are free to attempt to organize companies with direct employees.
ATA attorneys in the trial in late April in Los Angeles argued the port is not a market participant because it does not contract for trucking services, and in fact is paying itself back for its investment in clean trucks through a fee imposed on non-compliant trucks calling at the port.
Port of Los Angeles Executive Director Geraldine Knatz lauded the ruling. "We are extremely pleased that our concession program was upheld by the court ruling, including accountability of motor carriers," she said.
Judge Snyder has been overturned by an appeals court before: She rejected a trucking industry request last year for a restraining order against portions of the law and an appellate court sent the request back to her with a direction to grant the order.
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New Orleans container volume grows 60% | |
August 25, 2010 - The Port of New Orleans saw a 60 percent increase in containerized volume in the first half of 2010, the port said Monday.
The port handled more than 200,000 TEUs through June and said it is on pace to top 400,000 TEUs for the year at the Napoleon Avenue Container Terminal in 2010.
The port said it expects to augment capacity by adding two container gantry cranes in early 2011, and $11.8 million in projects to add acreage and efficiency to the Napoleon terminal.
New Orleans said not one vessel was redirected during the 120-day BP oil spill response, as ship arrivals in the Mississippi River rose 12 percent compared to the same period last year.
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