Skip to main content

LOGISTICS ; TOP 10 STORIES FROM SHIPPING INDUSTRY FOR 2013






 Top Stories of 2013



JOC Staff | Dec 27, 2013 1:04PM EST












# 1:








P3 Network Shakes Up Industry




Facing another year of overcapacity and moderate volume growth prospects, something had to the change within the container line industry. Long-hoped-for consolidation wasn't in the cards, and carriers' pursuit of greater economies of scale through ever-larger vessels accelerated. Enter the mega vessel-sharing alliances.






The three largest global container lines in June announced plans to operate a VSA of unprecedented scale on the Asia-Europe, trans-Pacific and trans-Atlantic lanes. 



By consolidating their services around fewer but larger ships, Maersk Line, Mediterranean Shipping Co. and CMA CGM aim to bring down their per-container costs, giving the carriers an advantage over lines operating smaller ships. 




The alliance would have a dominant share on the three east-west trades: 42 percent in Asia-Europe, 40 to 42 percent in the trans-Atlantic and 24 percent in the trans-Pacific. In response, the G6 alliance of APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL announced plans in December to expand into the trans-Atlantic and Asia-U.S. West Coast trade lanes to compete with the P3. 




Unsurprisingly, many shippers were unnerved by the news. To some, the big alliances, particularly the P3, smack of the making of a cartel, while others worry that the increased use of transshipment will create delays to their supply chains. The carriers argue that reliability would improve through the reduction of the chance of cancellation.






Whatever the case, it’s up to the regulators to determine whether the alliances proceed. 




The Federal Maritime Commission said it is “keeping an open mind” on the P3 and is scrutinizing the G6 proposal. 



The alliances can go forward immediately in Europe, although European Union authorities can dissolve the pacts months after deployment if they determine the alliances violate antitrust rules. 



How Chinese regulators see the alliances is anyone’s guess. 




Considering overcapacity and moderate volume growth are expected in the years to come, it wouldn’t be surprising to see new alliances emerge or the existing ones expand to take on additional carriers.










# 2:








Shift to Suez Gathers Momentum







With freight rates flat to down for much of the last two years, container lines embarked on a campaign to cut costs, the only way they could salvage what was left of their bottom lines. 



They had already been taking delivery of large post-Panamax ships that burned much less costly bunker fuel and gave them much lower slot costs, but by definition they were too large to transit the Panama Canal from Asia to the U.S. East Coast.





So what did they do? 



They deployed them on routes from as far north as Shanghai in China to the U.S. East Coast via the Suez Canal, which has no locks, and thus no size restrictions. 




Maersk Line, for example, ended all of its Panama services and shifted all its East Coast loops to the Suez. 



The route takes about a day longer, but the savings are large. The Panama Canal can only hope to regain the lost business when it opens its large new locks for business at the end of 2015.











# 3:






Former USMX Chief Jim Capo and ILA President Harold Daggett at White House Summit. Photo courtesy ILA.







ILA, Employers Agree on Coastwide Contract







International Longshoremen’s Association President Harold Daggett and James Capo, recently retired CEO of United States Maritime Alliance, were all smiles at a White House event in November recognizing labor-management cooperation.





At the start of 2013, however, smiles were scarce among labor and management officials in East and Gulf coast ports. The ILA and USMX were working under a second contract extension that averted a threatened coastwide strike at the year’s start. A strike remained a strong possibility.





Carriers in USMX were demanding productivity improvements in the high-cost Port of New York and New Jersey as a prerequisite for their approval of a coastwide agreement. The ILA was vociferous in opposition to many of those proposals.





With deft assistance from the Federal Mediation and Conciliation Service, the ILA and USMX agreed on a a six-year contract without a work stoppage. The agreement, ratified in April, was made possible by a deal on a New York-New Jersey local contract that blazes a path toward improved efficiency in the East Coast’s busiest port.




The agreement continued a 35-year streak of ILA-employer contracts without a coastwide strike, and left East and Gulf port users with reason to smile.








# 4:









Trucking’s Ticking Clock



Throughout 2013, the latest changes to the federal rules that govern how many hours truck drivers can work per day and per week embroiled the trucking industry and shippers in a battle with the Federal Motor Carrier Safety Administration. In the end, the FMCSA won the battle, though there’s been no armistice.





A courtroom challenge to the new rules, which restricted the use of the 34-hour restart and required a mandatory 30-minute break after eight continuous hours on-duty, failed in August, when the U.S. Court of Appeals in Washington upheld most of the rules, which took effect July 1.




Since then, truckload carriers have reported productivity losses of 2 to 4 percent, the result of drivers' ability to make fewer “turns” in a week.




The new rules mean truckers must hit a seven-hour window at the end of each workweek if they want to return to duty within 34 hours. Otherwise, their layover could be much longer.







Rates aren’t rising as fast as productivity sinks. Most shippers report minimal rate increases, if any, as a result of the HOS changes — at least so far. Stronger demand could lead to a delayed HOS-based price hike next year.






# 5:









‘Summer of Hell’ for NY-NJ Port






The summer of 2013 began on a promising note at the Port of New York and New Jersey. Terminals were recovering from Superstorm Sandy. The Bayonne Bridge raising was finally on track. Construction was transforming the port.





Then in the week after Memorial Day, things went horribly wrong. Many port users called it the summer of hell.








It began at Maher Terminals, which handles 40 percent of New York-New Jersey’s container volume. A new terminal operating system encountered unexpected problems that stalled operations and caused miles-long backups of trucks.





As ships diverted to other terminals, operational delays cascaded through the port. Terminals’ problems were aggravated by vacation-season labor shortages and major construction.






As the delays stretched into weeks, truckers were hit hard. On the worst days, drivers waited in 10- to 12-hour lines. Costs to drayage companies and owner-operators were estimated in the tens of millions of dollars.






Delays abated by fall, but the crisis highlighted the need for changes. As 2013 ended, the Port Authority of New York and New Jersey organized a broad-based Port Performance Task Force to discuss solutions. Recomendations are due in June.





# 6:












Chris Lytle Leaves Port of Long Beach as Political Wrangling Takes Spotlight






One good comment that the Port of Long Beach can make about 2013 is that the year is over. The nation’s second-largest container port was cruising along with double-digit growth in container volume when its popular executive director, Chris Lytle, announced suddenly in late May that he was leaving Long Beach to become executive director at the Port of Oakland.







In November, Long Beach Mayor Bob Foster called Harbor Commission President Thomas Fields before the city council on charges that Fields in his three years on the commission had failed to harmonize the interests of the port with the interests of the city. For the first time in the port's history, the city council voted to remove a commissioner before his term was completed. Soon afterward, harbor commissioner Nick Sramek resigned.








The feud between Foster and the port and its harbor commission began several years ago when the city administration championed a voter proposition to change the formula by which the port transfers some of its revenue to the city. The new formula, which increased the port’s annual contributions to the city, didn't set well with some of the commissioners and the port’s tenants. Several of the harbor commissioners also had challenged Foster on his plans to relocate the port’s headquarters building.












# 7:












Growth in Mexico-U.S. Intermodal



Domestic intermodal growth was the hot story, particularly as weak U.S. import growth kept international intermodal traffic gains lukewarm. But the steady gains of domestic intermodal pale in comparison to the red-hot jumps in U.S.-Mexico cross border traffic. Yes, the volume jumps came from a low level and healthy growth was there in 2012, but 2013 was when it went from railroad executive marketing pitches to being on the tips of economists’ tongues. New services were added as more international shippers announced plans to open up shop or expand existing operations south of the border. Shorter supply chains, rising Chinese labor cost and higher transportation costs have convinced white goods makers sourcing to Americans to follow the lead set by the auto industry years ago.





Kansas City Southern Railway, the only railroad to have a cross-border network, saw cross-border intermodal traffic spike 71 percent year-over-year in the third quarter. The railroad’s network connects with the other six Class I railroads, meaning the other larger carriers are salivating for cross-border volume even if it’s through a hand-off. KCS estimates it is only grabbing about 3 percent of the estimated annual 3 million truck moves that could be converted to its network. Intermodal is looking more attractive to cross-border shippers sick of waiting for goods to take hours to get through customs and paying the $100 to $250 for shuttle drivers to bring loads across the border.




Despite the potential, challenges await. 





Some shippers’ reliance on using “family” brokers and truck transport will be hard to break. 



And the Mexican government didn’t do any favors for the maquiladoras, or manufacturers focused on exports, by imposing a value-added tax and raising the income tax in the fall. 



Still, the economics of sourcing in Mexico for bulky products and goods with short lead times make sense to many shippers, meaning even more loads are headed down the tracks.








# 8:













Global Capacity Race Accelerates










Percent change in average ship size






The entry into service of the first of Maersk Line’s 18,270-TEU Triple E mega-ships was a sign of the container lines’ efforts to deploy larger vessels and reap the rewards of economies of scale, while posing challenges for port productivity. 



Together with its sisters, the Maersk Mc-Kinney Moller was built at Daewoo Shipbuilding and Marine Engineering in South Korea. 


It entered service in July, followed by sisters Majestic Maersk and Mary Maersk, deployed on the carrier’s Asia-Europe AE10 service.





Fifty-seven ships of 10,000 TEUs or more capacity will be delivered in 2014, compared with just 36 delivered in 2013, according to Jeffries. This will mean capacity growth globally will accelerate to 7 percent in 2014 from 6 percent in 2013.




 Ships aren’t just getting bigger; they’re also getting bigger at a faster rate (see chart).



 These include a total of 10 18,000-plus-TEU ships ordered in August 2013 by United Arab Shipping and China Shipping.










# 9:




 







MOL Comfort Snaps in Two



When the MOL Comfort broke into two pieces in the Indian Ocean on June 17, the shipping industry was flummoxed. Although it was encountering heavy seas, the 7,041-TEU container ship was designed to withstand much worse conditions.




The two parts of the ship floated apart with their cargo of containers bound from Singapore to Saudi Arabia. 



The aft section of the ship sank in deep water on June 27. 


A salvage tug took the fore section under tow, but a fire broke out on it and it too sank before reaching port. 




All 4,032 containers onboard were lost.




Did the MOL Comfort have a design flaw? 



It and its six sister ships were built before recommendations for changes for hull design changes — which came out of an investigation into the MSC Napoli disaster — could be put into effect. 


MOL withdrew the six sister ships from service to incorporate the latest design changes before putting them back in operations.











# 10:










EU Launches Antitrust Investigation Into Carrier Pricing Practices





The European Commission launched an investigation into alleged price collusion by 14 leading ocean carriers in November that could lead to large fines and lawsuits from shippers.






The commission is concerned the carriers appeared to be alerting each other of their price increases on routes to and from Europe via press releases and on their Web sites since 2009. Such “concerted practices“ are illegal under European Union antitrust rules.






The EU’s executive agency, which raided the European headquarters of several carriers in May 2011, said there is no time frame for the investigation, which could take up to two years.






There is prima facie evidence suggesting the commission may have a case against the carriers for price “signaling,” according to industry analyst Alphaliner. 



There were at least 34 rate hikes on the key Asia-Europe trade since 2009, with the timing and amount of the increases largely similar for the main carriers and the announcements made within a few days of each other.






The probe was announced as three carriers under investigation — Maersk, Mediterranean Shipping Co and CMA CGM — were seeking regulatory approval for their planned P3 Network alliance due to launch in the second quarter of 2014.






https://www.joc.com/

Popular posts from this blog

THE MOST SOUGHT AFTER MANGOES IN THE WORLD ....

While "Flavor" is very subjective, and each country that grows mangoes is very nationalistic, these are the mango varieties that are the most sought after around the world because of sweetnesss (Brix) and demand.

The Chaunsa has a Brix rating in the 22 degree level which is unheard of!
Carabao claims to be the sweetest mango in the world and was able to register this in the Guiness book of world records.
Perhaps it is time for a GLOBAL taste test ???





In alphabetical order by Country....










India




Alphonso





Alphonso (mango)
From Wikipedia, the free encyclopedia








Alphonso (हापुस Haapoos in Marathi, હાફુસ in Gujarati, ಆಪೂಸ್ Aapoos in Kannada) is a mango cultivar that is considered by many[who?] to be one of the best in terms of sweetness, richness and flavor. 


It has considerable shelf life of a week after it is ripe making it exportable. 

It is also one of the most expensive kinds of mango and is grown mainly in Kokan region of western India.

 It is in season April through May and the fruit wei…

INDIA 2016 : Mango production in state likely to take a hit this year

TNN | May 22, 2016, 12.32 PM IST






Mangaluru: Vagaries of nature is expected to take a toll on the production of King of Fruits - Mango - in Karnataka this year. A combination of failure of pre-monsoon showers at the flowering and growth stage and spike in temperature in mango growing belt of the state is expected to limit the total production of mango to an estimated 12 lakh tonnes in the current season as against 14 lakh tonnes in the last calendar year.



However, the good news for fruit lovers is that this could see price of mangoes across varieties decrease marginally by 2-3%. This is mainly on account of 'import' of the fruit from other mango-growing states in India, said M Kamalakshi Rajanna, chairperson, Karnataka State Mango Development and Marketing Corporation Ltd.




Karnataka is the third largest mango-growing state in India after Uttar Pradesh and Maharashtra.



Inaugurating a two-day Vasanthotsava organized by Shivarama Karantha Pilikula Nisargadhama and the Corporation at P…

MEET MELANIA TRUMP: The 5'11" supermodel married to Donald Trump

Aly Weisman, INSIDER

Sep. 2, 2015, 3:28 PM 











Chip Somodevilla/Getty Images







While Donald Trump loves to be the center of media attention, his third and current wife, Melania Trump, is a bit more camera shy.










The Slovenian-born model keeps a lower profile than her husband, doing philanthropy work, raising their son, working on a jewelry collection with QVC, and creating a $150-an-ounce caviar moisturizer.




With Trump on the campaign trail, Melania has stoically stood by his side.




But who exactly is Melania and where did she come from? Learn about Trump's other half here ...





Melania Knauss was born April 26, 1970, in Slovenia.




Wikimedia/Getty







The 5'11" brunette began her modeling career at 16, and signed with a modeling agency in Milan at 18.



Chris Hondros/Newsmakers via Getty









She took a break from modeling to get her degree in design and architecture at the University of Ljubljana in Slovenia.








Wikimedia/Getty

Source: MelaniaTrump.com









But after graduating, her modeling career took off and Me…