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China to Halt Hazmats

Chinas civil aviation authority will restrict transportation of dangerous goods in the country from July 1 through September 30. The Civil Aviation Authority of China will forbid transportation of all dangerous goods except medical items for human diseases at the airports of Beijing, Shanghai, Tianjin, Shenyang, Qinhuangdao and Qingdao. The new rules are undertaken to enhance security during the Beijing Olympic Games. At all other Chinese airports, the transportation of certain classes of "hyper dangerous" goods such as toxic gases not including aerosols, infectious substances and radioactive materials will require approvals from the state aviation agency. The order, numbered CAAC [2008] 52, also calls for enhanced security at all levels and warns shipping violators will be punished under the law. (Source: Air Cargo World)




 

Warehousing Grows, Slowly

One of the more resilient links in the global supply chain - the warehouse - may finally be feeling the effects of the economic slowdown and soaring fuel prices. Revenue growth among at North Americas estimated 8,000 commercial warehouses grew 7.7 percent in 2007, compared with 9.7 percent in 2006 and 9.5 percent in 2005, according to Armstrong & Associates "Warehousing in North America - 2008."

Though those figures would still be estimable for many industries, the trend in warehousing is away from the double-digit annual growth rates seen during much of the 1990s and early 2000s. Further, rising energy costs, looming regulations and a deteriorating freight economy are forcing shippers and their service providers to dig deeper to offset rising costs while maintaining service quality, making superior growth forecasts that much harder to support.

The continents 1.25 billion square feet of commercial warehouse capacity racked up $46 billion in gross revenue last year, and about $37.5 billion in net earnings, according to Armstrong. Value-added warehousing and distribution providers accounted for $27.6 billion in gross revenue and $22.5 billion in net earnings, after subtracting purchased transportation. Unlike trucking, where profit margins have been battered by the doubling of fuel prices in the last year, warehouse operators are largely immune from spiraling petroleum costs. Even among those providers who offer distribution services, the fuel price spikes have been mostly passed through to shippers and carriers.

But while warehouse operators dont take the brunt of the ongoing cost pressure, their customers - manufacturers, retailers, truckers and other carriers - feel it acutely. For the warehousing industry as a whole, Armstrong said, "Weve reached a level in this business where the third-party logistics providers have very good capabilities. And what were seeing is an expansion of those capabilities with a better IT base all the time.

Between this maturing North American warehouse market and the weakening economy, "Overall there hasnt been any significant movement in pricing," he said. Anderson said warehouse operators with 3PL capabilities are trying to differentiate themselves to earn higher margins. Theyll bid to take over truck brokerage or offer load consolidation to keep the customers costs down and earn themselves a bigger portion of that business, Anderson said. Over time, Armstrong and Anderson say, a new high-cost transportation environment will force shippers to make distribution network changes that could benefit warehouse operators. Pending regulations on everything from customs to fuel and air quality will intensify the pressure. (Source: Traffic World)




 

TSA Announces Certified Cargo Screening Program

The Transportation Security Administration is working feverously to screen all passenger plane cargo by Aug. 3, 2010, in accordance with "Implementing the Recommendations of the 9/11 Commission Act of 2007." Fifty percent of such cargo must be screened by Feb. 3, 2009.

The system must, "provide a level of security commensurate with the level of security for the screening of checked baggage." TSA requires the screening of all cargo at the piece level prior to boarding a passenger aircraft. To assist in achieving the requirements under the Act, TSA is designing a program known as the Certified Cargo Screening Program.

Allowing the CCSP to be included as a tool, as part of the risk based, multi-level screening arsenal, makes sense because it balances the need for security on passenger planes while meeting the needs of the shipping public. It could help avoid significant handling delays at airlines where all screening currently takes place and where existing space and labor constraints will be exacerbated under the full screening mandate.

The program carries cargo security into the supply chain through effective shipper and forwarder involvement instead of dropping freight at the door of the plane at the last minute. TSA claims all certified screeners will experience decreased cargo delays and expedited supply chain flow. They will have the ability to ship certain cargo types without potential invasive screening later on in the chain and be able to shrink wrap consolidations and build bulk configurations. They will also avoid potential cargo screening fees by entities later in the supply chain. The CCSP will enable Certified Cargo Screening Facilities to screen cargo prior to acceptance at the freight forwarder or air carrier.

The program is open to 3PLs, manufacturing facilities and distribution centers if their facility directly tenders cargo to a freight forwarder or air carrier. These entities must adhere to stringent security requirements set by the TSA that include onsite validations, periodic inspections, maintaining strict chain of custody measures and the requirement to screen cargo at the piece level. Shippers volunteering for this program will become regulated parties subject to strict TSA oversight.

Forwarders are also eligible to apply, but for a price. Unlike shippers, they will be required to purchase TSA-certified technology to perform the task. Forwarders will also bear the significant tab of training employees to operate the machinery. Although the agency has not released an official cost, some believe it could reach up to $150,000 per facility with no government funding assistance available to reimburse costs. That is a big sum for most small to medium sized forwarders competing on characteristically razor thin industry margins.

Securing aircraft and air cargo comes with a hefty price tag, but the government has a responsibility to provide safe, secure transportation systems for the American traveling public. However, government leaders seem to have lost sight of the costs and the governments role in securing the homeland. Screening all air cargo under the new legislation tops $3.6 billion, according to the Government Accountability Office. Yet, the White House is requesting just $106 million to perform the task.

That it is a volunteer program should not detract from the serious economic repercussions posed to those who are forced to opt out. Those companies choosing not to become CCSFs are likely to face bottlenecks at the airport, causing significant handling delays as airlines screen their shipments. It is critical that Congress addresses this issue promptly to ensure consumers and businesses are not faced with a competitive disadvantage which has the potential to put forwarders out of business. The CCSP has the potential to be a progressive tool by having the shipping public help make skies safer. However, forwarders should not have to assume the full financial burden for an inherently governmental function. (Source: Air Cargo World)




 

OECD Cuts Growth Forecasts

The Organization for Economic Cooperation and Development (OECD) is cutting its forecast for economic growth in the United States and the 15-nation euro region for this year and next year. In its new report, the Paris-based think tank says that economic growth in the OECDs 30 members will slow to 1.8 percent in 2008 compared with its December forecast of 2.3 percent. The report forecasts that the U.S. economy will grow just 1.2 percent this year and 1.1 percent in 2009. Economic growth in the euro area and Japan will slow to 1.7 percent this year. The report says financial market turmoil, sharply higher oil and commodity prices and declining housing prices are making it difficult for policymakers to create effective policies. (Source: JoC)




 

Freight Index Unchanged

After a record decline in March, the U.S. Freight Transportation Services Index was unchanged in April. Combining statistics for trucking, railroad and intermodal freight, barges, pipelines and air cargo, the Department of Transportations Bureau of Transportation Statistics reported that April was the third consecutive month without any growth. While February and April were flat, March saw the largest decline since August 2006, offsetting Januarys increase, which was the largest in two years. At 109.4 in April, the freight TSI was up 1.3 percent since its recent low of 108 in September but down 3.3 percent from its peak of 113.1 reached in November 2005. The bare 0.1 percent increase over April of 2007 follows two consecutive April-to-April declines. (Source: JoC)




 

Fuel Puts Airlines in Red

Hit hard by rising jet fuel costs, the United States major passenger airlines combined for more than $1.3 billion in losses in the first quarter, in the worst financial performance for the carriers in nearly three years, according to the U.S. Department of Transportation. The carriers combined operating loss margin in the first three months was 5.2 percent, the DOTs Bureau of Transportation Statistics said, a sharp turn downward from the 7.7 percent profit margin the airlines showed in last years first quarter. The results were particularly bleak since they came largely before a sharp escalation in jet fuel prices that sent finances into a tailspin. Fuel had an enormous impact on the results, however, eating up 29.4 percent of the airlines operating expenses in the first quarter compared to 13.8 percent in the same quarter five years ago. Fuel cost the seven largest passenger airlines more than $7.9 billion in the first quarter and the expense per available seat mile was 50 percent greater than in the same quarter last year. (Source: Air Cargo World)




 

Oil Fuels Trade Deficit

The United States trade deficit grew more than expected in April, by nearly 7.8 percent to $60.9 billion from a downwardly revised $56.5 billion in March. It was the biggest monthly increase since September 2005. Exports and imports also set records, the Commerce Department reported.

A key factor was record-high crude oil prices, which climbed $6.98 to $96.81 per barrel in April, the second-highest increase on record. Imports from Saudi Arabia, Venezuela and other members of OPEC totaled $20.9 billion, also a record. Imports of goods and services topped the previous high mark at $216.4 billion, and showed their biggest one-month gain since November 2002. Along with oil, autos and capital goods recovered from a drop in March. The trade gap with China increased by nearly 26 percent to $20.2 billion, as imports surged and U.S. exports slumped.

Buoyed by the weak dollar, U.S. exports rebounded to a record $155.5 billion after dropping slightly in March. On-year gains were posted by industrial supplies and materials, capital goods, foods and beverages, consumer goods and automotive vehicles and parts. Imports posting gains from April 2007 included industrial supplies and materials, capital goods, consumer goods, and foods and beverages. Auto imports were virtually unchanged. For the three months ending in April, exports averaged $153.2 billion, while imports averaged $212.5 billion, for a deficit of $59.3 billion. For the three months ending in March, the average trade deficit was $58.3 billion, reflecting average exports of $151.4 billion and average imports of $209.7 billion. (Source: JoC)




 

U.S. Airlines Drop Capacity

Two of the largest airlines in the United States will dramatically reduce the size of their fleets and staffs in the coming year. United Airlines said it would remove 100 planes from its mainline fleet and lay off 1,400 to 1,600 employees. Continental Airlines said it would let go of 67 planes and 3,000 jobs. The cuts at United involve 17 percent of the airlines capacity in an effort to bolster pricing and reduce costs as rising jet fuel prices are expected to add $3 billion to expenses this year. The company expects to retire 30 previously announced Boeing 737s and another 50 by the end of the year. Twenty more planes will go out of service by the end of 2009.

"Today we are taking additional, aggressive steps that demonstrate our commitment to size our business appropriately to reflect the current market reality, leverage capacity discipline to pass commodity costs on to customers, develop new revenue streams and continue to reduce non-fuel costs and capital expenditures," said Glenn Tilton, Uniteds chairman, president and CEO.

Continentals cuts will reduce mainline capacity 11 percent in the face of jet fuel price increases of as much as 75 percent over the past year. At current capacity, the airline projects fuel cost increases of $2.3 billion in the next year. "These record fuel costs have fundamentally shifted the economics of our business. At these fuel prices, a large number of our flights are losing money, and Continental needs to react to this changed marketplace," said Larry Kellner, Chairman and Chief Executive Officer, and Jeff Smisek, President, in an employee bulletin.

United and Continental are the latest to cut capacity in a market that is only recently recovering from multiple bankruptcies. In March, Delta Air Lines said it would cut 2,000 jobs and cut capacity 10 percent. American Airlines last month said it would cut domestic capacity 11 percent and eliminate more than 1,000 jobs. (Source: Air Cargo World)




 

IATA Predicts Heavy Industry Losses

The International Air Transport Association (IATA) revised its industry financial forecast for 2008 significantly downwards to a loss of US$2.3 billion. The forecast uses a consensus oil price of $106.5 per barrel (Brent) crude. This is a swing of $6.8 billion from the previous forecasted industry profit of $4.5 billion that was announced in March and based on an average oil price of $86 per barrel.

“For every dollar that the price of fuel increases, our costs go up by $1.6 billion,” said Giovanni Bisignani (left), IATA director general and chief executive officer at the association’s 64th AGM in Turkey. The industry’s total fuel bill in 2008 is expected to be $176 billion (based on oil at $106.5 per barrel), accounting for 34 per cent of operating costs. This is $40 billion more than the 2006 bill, which was $136 billion (29 per cent of operating costs). In 2002, the bill was $40 billion, equal to 13 per cent of costs.

“We also need to take a reality check. Despite the consensus of experts on the oil price, today’s oil prices make the $2.3 billion loss look optimistic. For every dollar that the oil price increases, we add $1.6 billion to costs. If we see $135 oil for the rest of the year, losses could be $6.1 billion.

“The situation has changed dramatically in recent weeks. Oil skyrocketing above $130 per barrel has brought us into uncharted territory. Add in the weakening global economy and this is yet another perfect storm.

“Oil is changing everything. There are no easy answers. In the last six years, airlines improved fuel efficiency by 19 per cent and reduced non-fuel unit costs by 18 per cent. There is no fat left. To survive this crisis, even more massive changes will be needed quickly. Air transport is a catalyst for $3.5 trillion in business and 32 million jobs. This is an extraordinary crisis with the potential to re-shape the industry with impacts throughout the global economy. Governments, industry partners and labour must deliver change,” said Bisignani. (Source: Air Cargo News)




 

OAG Global AirFreight Forecast 2008-2017

The economic climate in U.S. and the top global air freight markets over the next five years are facing uncertainty. The rising cost of operations will force the industry to make tough decisions that will impact air freight capacity on the global level. As a result, FTKs may grow slower than forecast if the U.S. recession materializes or exceeds forecasted levels. Meaning, FTKs may not return to the recent growth trajectory until after 2011-2012. As the U.S. economy rebounds, long-term prospects remain positive. Overall global economic expansion coupled with developing countries becoming sources of both manufacturing capacity as well as consumer wealth, and the implementation of efficiency measures by companies will help to make air freight an important component of the global supply chain. Overall, the OAG 2008-2017 forecast is aggressive. High single-digit to low double-digit growth is forecast as globalization continues, China matures and businesses explore better ways to manufacturer products. Air freight will continue to grow as businesses exploit economies of scale and cost rationalization in their supply chains, while also seeking to expand their consumer base.

(Source: Air Cargo World)




 

Weak Peak Container Traffic Forecast

Cash-strapped consumers, cautious retailers and record-high oil prices are likely to drive down container volumes at major U.S. import gateways through the peak shipping season, according to the May Port Tracker published by Global Insight and the National Retail Federation. Import container traffic is expected to be quite weak through September due to the underlying weakness in consumer demand in the U.S. economy. The Port Trackers projection builds on dismal U.S. imports during the first quarter of the year. The 10 North American ports surveyed in the report handled 1.16 million 20-foot containers in March, the latest month for which data is available. That is the lowest monthly volume handled by the ports since February 2006. It is estimated that the ports handled 1.28 million TEUs in April, down 3.2% from April 2007. May traffic volumes are projected to be off by 4.8%; 7% in June, 2% in July, and flat in August from the previous year. Growth should return in September, when volumes are projected to be 3% higher on-year. The decline in containerized imports is reflected in the performance of intermodal rail traffic. Intermodal rail volumes were down 3.5% in the first 17 weeks of the year, according to the Association of American Railroads. All major North American gateways are expected to be free from congestion into the fall months. Rail and truck performance should also be adequate. (Source: www.joc.com)




 

Air Cargo Traffic Surges

Cargo traffic for U.S. airlines grew at its sharpest rate in a year-and-a-half in February, advancing 6% on the strength of expanding trans-Atlantic trade, according to data from the U.S. Air Transport Association. The cargo business on Atlantic lanes, where the weaker U.S. dollar has spurred exports, grew 12.2% in February, the largest increase on that key air trade corridor since October 2004. Domestic air cargo business also accelerated in February, growing 3.8% after expanding 3.1% in January. The increase was the largest expansion in a single month on the domestic side since June 2006, although there already are signs that the domestic traffic may be slowing. The February increases came before the sharp run-up in jet fuel prices that has led to higher fuel surcharges. (Source: Air Cargo World)




 

Price fixing on Cargo Shipments

The European Shippers Council (ESC) has joined the class action in ongoing litigation against air carriers accused of engaging in a price-fixing scheme. The class action started two years ago in the U.S. by a number of airfreight customers against a group of flagship airlines for what they alleged was a violation of U.S. and EU competition laws. The complaint alleged that those airlines conspired to fix prices on costs associated with airfreight worldwide. If the class action is successful, it would allow buyers of airfreight services to recover compensation from the airline cartel.

The ESC said it decided to join the class action in order to help those European shippers that believe they have a valid claim against the airlines that have allegedly or already proven to have participated in the price-fixing activities. "The effect of the surcharges illegally agreed and set by some airlines has been to artificially inflate cargo shipment prices to the benefit of those cartel members and to the detriment of the customer which is in clear violation of the law," ESC Secretary General Nicolette van der Jagt said in a statement. The cartel member carriers charged their customers surcharges calculated in nearly identical ways, thus eliminating competition between them.

Various carriers have pleaded guilty and were sentenced to pay criminal fines: Lufthansa, Cargolux, British Airways and Korean Air, Qantas Airways and Japan Airlines International (Sources: American Shipper & Air Cargo World)




 

Container Shortage puts U.S. Export Boom in a Box

Many

Many U.S. companies hoping to profit from surging exports created by the weak dollar are facing an unexpected hurdle: There arent enough of the big, metal shipping containers that help form the backbone of the global economy.

The shortage is threatening to limit the benefits U.S. producers can reap from one of the few bright spots in an otherwise troubled economy. While housing and financial markets have slumped, many companies have seen a rise in their export business, helping offset the domestic slump and lessening what would have already been a far more painful downturn. Shipping containers -- and the way theyre handled -- reflect how the U.S. interacts with the global economy, which is one reason the problem has emerged now. For years, the U.S. crafted a trading system that was designed to pull in masses of imported consumers goods such as sneakers and VCRs as efficiently as possible from countries like China. Far less was expected to flow the other way.

What has happened now has thrown a wrench into the works. Cutbacks by U.S. consumers have slowed the growth of imports, while the weak dollar is making the U.S. into an export machine. Yet another problem: Many shipping lines, including Maersk, have shifted container capacity away from the U.S., just when U.S. producers need them most.

This has meant lost orders, delays, or a scramble for alternatives, such as costlier air freight. U.S producers cant book containers on a few days notice -- three weeks are needed. Analysts say shipping costs are rising, too. Mr. Damas, the London-based consultant, says the cost of shipping a 40-foot container from the West Coast to China is now $1,500, up at least 20% in the past year. Analysts say that barring a global slowdown that put the brakes on U.S. exports, the problem will dog exporters at least through the end of next year. (Source: Wall Street Journal)




 

China agrees to U.S. Checks of C-TPAT Importers

Customs and Border Protection announced that it had begun a pilot program with China to validate importers under the Customs-Trade Partnership Against Terrorism. Under the program, China Customs will validate the security of facilities using the U.S. C-TPAT criteria, assisted by U.S. C-TPAT specialists. Three U.S. companies that are C-TPAT members and source most of their goods in China have volunteered to be validated in the program, CBP said, without revealing the companies identities. It took several months of intense discussions with Chinese officials to get the validation program under way. Since C-TPAT began, China has been firmly opposed to allowing U.S. teams to inspect facilities in-country. As a result, some 300 importers have not been able to get Tier 3 C-TPAT benefits, the highest level a company can achieve. (Source: www.joc.com)




 

Europe’s Air Cargo Slows

Cargo traffic growth for European airlines slowed down sharply in March, expanding only 1.5 percent in a new sign that rising jet fuel prices are cutting into international air freight shipping. The increase reported by the Association of European Airlines was the lightest expansion in eight months and a sharp pullback from the 7.2 percent gain European carriers showed in February. Air trade in March with Asia - the largest market for European carriers - was flat with the same month a year ago. Traffic over the North Atlantic, which has been bolstered by growing U.S. exports, was up 3 percent. Several air carriers have reported a slowdown in air shipping demand as jet fuel prices have soared as high as $3.70 a gallon in some markets, more than double the price at the start of 2007. (Source: www.aircargoworld.com)




 

3PLs thrive despite U.S. ills

Despite the ongoing freight recession in the United States, revenues of U.S. third-party logistics service providers grew to $122 billion in 2007, according to the report “U.S. and Global 3PL Financial and Acquisition Results and Projection to 2010” by Armstrong & Associates. Gross revenue grew by 7.4% while net revenue grew 7.2%, the report found. Global revenues grew to $487 billion, driven by expanding growth in Asia. Revenue growth was highest in non-asset transportation management. Overall growth continued a pattern of being more than three times the growth of the U.S. Gross Domestic Product. The growth continues to be driven by companies outsourcing to concentrate on core competences, the need for sophisticated supply chain information technology solutions, and globalization. It is predicted that U.S. 3PL revenues will exceed $150 billion in 2010 after modest growth of 5.5% in 2008 and 7.5% in 2009. International transportation management grew by 9.5%. Domestic transportation management grew 8% with net income margins averaging 13.4%. This includes freight brokerage and related value-added services. (Source: Logistics Management & Journal of Commerce)




 

Uproar over fuel surcharge change

With the seemingly unstoppable rise in the price of oil, some airlines have raised the ire of forwarders by levying fuel surcharges based on the size of shipments instead of their weight. Forwarders are particularly furious over some airlines policy to calculate the fuel surcharge in the same way they compute rates - converting relatively light-weight bulky cargo by a volume factor. While nobody disputes the volume conversion approach in rate calculations, cargo agents are livid over the extension of the mechanism to fuel surcharges. They argue that they are being gouged, since bulkier cargo does not require higher fuel burn.

 

 

With base rates painfully low (on some sectors the surcharge is now twice as high as the rates), carriers are adamant that the fuel surcharge reflects the price of kerosene and should not be included in the rates. This is frustrating freight forwarders, who have argued that they have costs associated with collecting the surcharge from shippers and passing it on, not to mention the risk of shippers failing to pay the extra levy.

 

 

On April 7, the fuel surcharge broke through the one-euro-barrier, as Cargolux raised the levy on fuel to 1.05EUR or US$1.64 per kilo. Other carriers, including Northwest and British Airways, pushed up their surcharges to $1.48 a few days earlier, but they are likely to move again.

 

 

With or without volume conversion, fuel surcharges are undermining the viability of shipping by air, forwarders warn. It is reckoned that this is adding impetus to the migration from air to ocean. Carriers are trying very hard to make ends meet. The stratospheric price of oil is dealing the airlines a double-whammy. Yields are deteriorating further, and the rise in fuel surcharges is feeding the migration away to slower, less costly modes. (Source: Cargo News Asia)




 

Plans to shut down West Coast Ports May 1

The International Longshore and Warehouse Union (ILWU) has called for an eight-hour stop-work meeting during the day shift on May 1 at all West Coast ports to protest U.S. involvement in the Iraq war. The union also called for the immediate and safe return of U.S. troops.

The ILWU locals are permitted to call one stop-work meeting each month to discuss union business. However, the stop-work meetings must be conducted during the second work shift, when cargo activities at most ports are lightest. "Contractually, theyve gone down the right avenue, but we are not going to agree to it," said James McKenna, President of the Pacific Maritime Association. "PMA will respond to the union shortly.” If the ILWU wishes to change the stop-work meeting time, the union must request permission. The ILWU has submitted its request in plenty of time to comply with the waterfront contract, McKenna said. Nevertheless, employers do not want all West Coast ports to be shut down for eight hours during the busy day shift on May 1, he said. (Source: JoC)




 

LA-Long Beach Courting Problems when Growth resumes

The Los Angeles-Long Beach port complex is suffering in the short-term due to weak imports from Asia and cargo diversions to East Coast ports, but long-term problems will be even worse if the hub is not able to build the marine terminal and inland infrastructure needed to accommodate growth when it returns. Due to a continuing shift toward all-water services from Asia to the East Coast, the port is not positioned well to share in growing imports later this year. Total U.S. containerized imports in the trans-Pacific increased 0.6 percent in 2007, with East Coast ports experiencing an 8.78-percent increase in volume and West Coast ports reporting a decline of 1.87 percent.(www.joc.com)




 

U.S. Air Cargo weakens

The American carriers grew airfreight volume by 1.1 % in 2007, the weakest showing for U.S. airlines since 2003, according to figures released by the Air Transport Association. The tepid growth included a 0.1 % decline in domestic air cargo traffic, leaving that struggling business behind the traffic levels American carriers reported in 2000. The domestic business grew just 0.9 % in the fourth quarter, including 0.1 % in December, based on cargo ton miles flown. International air cargo expanded 2.2 % in 2007 over the year before. That included a 5.9 % increase in December that was the sharpest growth in international cargo traffic for U.S. carriers in 15 months. Pacific traffic showed the strongest expansion in December, growing 6.5 %. But trans-Atlantic traffic showed steady growth throughout the year and was up 5.7 % in December and has now grown more than 50 % over the past four years. (Source: Traffic World)




 

Three Carriers combine Latin American Services

Hamburg Süd, Aliança and Costa Container Lines will combine and upgrade their current services between the east coast of South America and the north coast of South America, Central America, the U.S. Gulf and the Caribbean, effective March 1. The lines said their combined operation will offer three slings deploying a total of 14 vessels, covering a large combination of ports with improved transit times. Sling 1 will consist of seven 2,200-TEU vessels with the following rotation: Rio Grande, Paranagua, Itajai and Santos, Brazil; Puerto Cabello, Venezuela; Cartagena, Colombia; Veracruz and Altamira, Mexico; Houston; Manzanillo, Panama; Cartagena; Puerto Cabello; La Guaira, Venezuela; Suape, Brazil; Santos; and Rio Grande. Sling 2 will consist of six 1,600-TEU vessels with the following rotation: Santos; Rio de Janeiro; Salvador, Brazil; Puerto Cabello; Cartagena, Santo Tomas de Castilla, Guatemala; Havana; Veracruz; Altamira; Cartagena; Puerto Cabello; and Santos. Sling 3 will consist of one 1,400-TEU vessel, with the following rotation: Cartagena; Manzanillo; Puerto Limon, Costa Rica; Rio Haina, Dominican Republic; and Cartagena. The new services will connect with the extensive transshipment networks operated by Hamburg Süd and Costa Container Lines in the Caribbean as well as comprehensive additional coverage in South America via Alianças connections.(Source: www.joc.com)




 

Shippers issued with Warning as Rate Negotiations begin

Ships withdrawn from the Pacific trades as U.S. import growth vanishes have found work elsewhere and will not be returning in the foreseeable future. That is the message to shippers as lines and their customers prepare for the annual round of contract negotiations. Shippers will not be able to badger lines into accepting lower rates on the grounds that there is excess capacity on the Pacific, APL chief executive Ron Widdows warned. Many have been transferred to the sizzling Asia-Europe trades and, contrary to what US importers might think, “will not be yanked back onto the Pacific” unless financial incentives improve dramatically. It is estimated that member lines have cut transpacific capacity by some 6%, while for the trade overall the decline is between 10%-12%. That has left ship utilization high and lifted confidence among lines that they will secure higher rates in the forthcoming contract renewal season. But top priority is to obtain compensation for soaring fuel costs by incorporating a floating bunker adjustment factor into contracts. NOL revealed this week that average freight rates in the six weeks to February 8 were 17% up on the year at $2,989 per feu. (Source: JoC)

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