MARSEILLES' CMA GGM, the world's third biggest container shipping line after Maersk and MSC, has posted a net loss of US$30 million against a $1.6 billion profit in 2010 despite last year's four per cent revenue increase to $14.87 billion.
Container volume was up 11 per cent against market growth of 6.5 per cent reaching a record high of 10 million TEU.
CMA CGM continued to dispose of non-strategic assets, said the company, further strengthening its balance sheet by issuing $500 million in equity notes to the Yildirim Group and raising $945 million in separate dollar- and euro-denominated bond issues.
Disappointing net results were attributed to overcapacity in the trade and a steep rise oil prices, with bunker costs soaring 34 per cent year on year.
"CMA CGM nevertheless enjoyed a satisfactory operating performance, thanks to its efficient fleet, global network and sustained cost discipline," said a company statement.
"Although the beginning of the year was difficult for the entire industry, freight rates are now trending upwards, especially outbound Asia. Several shippers, including CMA CGM, have announced and are introducing significant rate increases as from March," said the statement.
CMA CGM plans to continue implementing operating partnerships with MSC on the Asia/North Europe and South America lines and with Maersk on the Asia/Mediterranean, Adriatic and Black Sea trades.
The group will also deploy more efficient, modern and cost-effective vessels on every trade and develop more innovative, high-quality information technology services with IBM.
CMA CGM is also pursuing a cost reduction plan, which is expected to deliver $400 million in savings this year. "In the same way, the decline in charter rates will reduce operating costs by $80 million in 2012," the company said.
Thanks to all these measures, the group expects to report a profit in 2012, in a market that is difficult to predict given the scheduled arrival of a large number of new vessels and further increases in bunker costs.
The group said it remains confident in the future of the industry and will strengthen its position in Russia, India, Latin America and Africa, as well as in the reefer market.
Said CEO Rodolphe Saade: "Once again this year, CMA CGM has demonstrated its strong resilience at a time of intense turmoil in our industry. Our operating and financial performances were among the best in the industry. We set up strategic operating partnerships with MSC and with Maersk to address market challenges and maintained our commitment to controlling costs. We expect the market to improve in 2012, particularly in the second half."
Source Shipping Gazette - Daily Shipping News
MAERSK Line and the Burlington Northern Sante Fe Railroad (BNSF) have agreed to a 95 per cent on-time delivery scheme called Flagship for US-bound Asian cargo via Los Angeles to Chicago, Dallas, Fort Worth, Houston, and as far east as Tennessee and Ohio.
Under the deal, Flagship will provide dedicated, non-stop BNSF rail service that arrives at an agreed time. Affected loops will be the TP5, TP6 and TP8, which will result in major changes to alliance agreements, reports London's Containerisation International. Flagship appears to be the transpacific extension of the "conveyor belt" concept of the shipping line's Daily Maersk Asia-Europe service launched last September.
"By ensuring on-time delivery, Maersk becomes an extension of a customer's production line to increase supply chain efficiencies, improve inventory management, and help move products to market as planned," said a statement from the Danish shipping giant.
"Flagship trains bypass connecting points along the route allowing us to give an unmatched velocity," said Maersk, which also recently announced and extension of its fuel-saving slow steaming programme.
But Maersk spokesman Timothy O'Connell cautioned: "Speed is not the essence of this service - being on-time is. Absolute reliability is not about being faster. It's about being reliable."
Source Shipping Gazette - Daily Shipping News
GERMANY's Hapag-Lloyd, the world's fourth biggest container shipping line, will levy a US$150 per TEU rate increase on March 15 on all cargo from the Far East (excluding Japan) and Oceania to India, Pakistan, Bangladesh and Sri Lanka.
Rates on all cargo moving from Japan to the Red Sea will be subject to an increase of $250 per TEU starting April 1. From Japan to Australia, the increase will be $250 per TEU from April 1. Hapag-Lloyd said it would apply an increase of $300 per TEU on cargo from northeast Asia to Australia from April 15.
Source Shipping Gazette - Daily Shipping News
STRIKE-PLAGUED Ports of Auckland (PoA) will start sacking 292 striking dockers next week and make new hires, said PoA chief executive Tony Gibson, adding that the fired workers could reapply, but under a new contract.
"This decision has not been made lightly, but we believe it is vital to ensuring a successful and sustainable future for the port," said Mr Gibson.
Said Maritime Union president Garry Parsloe: "We cannot let Ports of Auckland get away with this. It's by no means the end of our campaign. Port management wants to take away job security from 300 ordinary working families."
Source Shipping Gazette - Daily Shipping News
TOUGH contract talks between maritime employers and eastern North America's International Longshoremen's Association (ILA) are expected after ILA president Harold Daggett spoke of going to "war" with shipping lines that withdrew from the ILA-controlled container chassis scheme.
Some employers see a conflict of interest in that longshoremen not only decide what repair chassis work is needed, but also employ themselves to do the work before they allow equipment to leave the terminals.
"They want to get rid of us in chassis - we'll see about that. We continue to see attacks on our jurisdiction," said Mr Daggett.
"We declare war on this - who gives them the right to say let's get out of chassis; it's in our contracts - it'll put hundreds out of work," he said.
Mr Daggett said the chassis market is vital to protect jobs, so the ILA will not allow carriers to contract out the job of moving chassis to other non-ILA sources, such as pools and truckers.
The master contract between the ILA and United States Maritime Alliance (USMX) for the Atlantic and Gulf ports will expire on September 30.
There are four major hurdles before reaching an agreement, reports London's Containerisation International. They are new technology and automation, jurisdiction, container weights and chassis.
"Automation is going to be the toughest negotiation - if left unchecked it will be a disaster for organised labour. Look at the European ports where we see the devastating effect on labour," he said.
Speaking for the employers, USMX chief executive James Capo said "failure to reach an agreement is not an option and successful negotiations are in the best interests of us and the ILA".
Source Shipping Gazette - Daily Shipping News
EUROGATE Container Terminal, Wilhemshaven, received four of the world's biggest container cranes from Shanghai's Zhenhua Port Machinery Company (ZPMC), each capable of handling vessels of 25 container rows across deck with a load bearing capacity of 120 tonnes.
The ZPMC super post-panamax quay cranes arrived following two months at sea on ZMPC's vessel from Shanghai with a further four due to depart from China through to Cape of Good Hope, Canary Islands and on to the North Sea.
Eventually, Germany's deep-water container port will have 16 of these cranes, with eight on order. Each weighs 1,750 tonnes, a pylon height of 83 metres and 126 metres when extended by jib.
Said Eurogate Wilhemshaven managing director Marcel Egger: "Currently the world's biggest container vessel with a load capacity of 15,550 TEU has 22 container rows on deck, while all other mega carriers, including the 18,000-TEU ship on order have 23 container rows on deck. Our cranes on the other hand are capable of handling as many as 25 containers on deck and are therefore suited to handling ships that are not yet on the market."
The cranes will be moved ashore one by one during the coming weeks and made ready for trial operation with further work to include connection to the medium voltage power supply.
Eurogate Wilhemhaven will have a draught of 18 metres and will handle the world's largest containerships at low tide.
Source Shipping Gazette - Daily Shipping News
SLOW-STEAMING's impact on costs continues to puzzle shippers and carriers who agree and disagree that it negates advantages of the all-water Panama route from Asia to the US east coast and others asking whether it costs carriers more at a time of low utilisation and more ships on longer, slower loops.
"Ironically, carriers are discovering that slow-steaming increases their operating costs because the fuel savings are more than offset by the higher costs of operating a longer strings," reports DC Velocity, of Attleboro, Massachusetts.
"The roundtrip cost of operating a string of seven 8,500 TEU ships steaming at 13 knots in the US west coast-Far East trade is higher than operating a string of five ships in the same trade steaming at 19 knots, according to data from Paris-based advisory firm Alphaliner," said DC Velocity.
The advantages are also apparent. With bunker costs up to US$650 a ton in 2011 from $350 a ton in recession-wracked 2009, slow-steaming can reduce costs three to five per cent as fuel burn drops as ships move through water more slowly.
"Slow-steaming is here to stay," Rick Wen, vice president of the US arm of Hong Kong's Orient Overseas Container Line (OOCL).
But Theodore Prince, who runs a Richmond, Virginia maritime consultancy bearing his name, has doubts, predicting companies will adopt an inventory bifurcation, with higher-value Asian-made goods entering on the west coast and lower-value commodities heading to the east through Panama where longer transits mean less.
Mr Prince said he believes the expanded Panama Canal will result in little cargo diversion from west coast to east coast ports because slow steaming lengthens transits and magnifies the problems they create.
Beneficial Cargo Owners (BCOs) won't achieve sufficient cost savings from an all-water route through the canal to justify the longer sailing times when compared with offloading cargo on the west coast and trans-loading to rail for the inland move, he said.
"Slow-steaming has just widened the discrepancy," he said. "The railroads haven't slowed down."
Maersk North American sales vice president William Woodhour said carriers may yet launch premium services at faster speeds, which, of course, would come with higher rates. "You have to segment your market and focus faster speeds on customers who want it," he said.
Tim Feemster, vice president and director of global logistics at real estate giant Grubb & Ellis, said it's possible that the marketplace would welcome an expedited form of liner service, noting that railways and truckers have launched similar services in recent years. "The trouble is, we haven't seen the demand for it up to now," he said.
For shippers, a longer voyage could mean additional inventory carrying costs. Slow-steaming also complicates a company's ability to react to unexpected events, such as bad weather or a labour disruption, which could affect product flow. Slower speeds can trigger changes in ordering, production, and scheduling as companies adjust to filling any holes in inventory if the goods are still on the water rather than in a DC or with their customer, said the report.
To offset slow steaming, NCR Corp, a global technology company based in Georgia, will sometimes intercept shipments arriving on the west coast before they can be transloaded to a railhead and have them moved inland by truck for faster delivery, said NCR vice president Michael Chandler.
But Genuine Parts Co vice president Mike Orr said his company has yet to experience any adverse impact on its business as a result of slow-steaming.
Home Depot supply chain vice president Mark Holifield said slow steaming causes his firm no trouble because ocean freight is slow and a couple of days of voyage variability means nothing.
"Predictability and consistency is more important than speed," said Mr Holifield, adding that slow-steaming is acceptable "as long as we can count on the published schedule."
Source Shipping Gazette - Daily Shipping News
JAPAN's Mitsui OSK Lines (MOL) has announced that it will work together with Mitsui Engineering & Shipbuilding to conduct a demonstration run of an electrically-controlled slow speed diesel engine modified to include a gas injection system.
The engine will be designed, manufactured and delivered to a shipyard for one of the shipping group's newbuildings, which is being built with oil injection specifications. During manufacturing it will be temporarily modified to an electrically-controlled gas injection, dual fuel, slow speed diesel engine. It will be run with vaporised LNG at MES Tamano Works in the first half of 2013.
LNG has recently been highlighted as one of the potential propulsion fuels for future ship design, a company statement said.
It plans to start investigating the adoption of gas injection technology for future vessels, along with its Sempaku ISHIN project, one of the environmental strategies in its mid-term management plan "Gear up! MOL".
Source Shipping Gazette - Daily Shipping News
GUIYANG's Gaimao Logistics Centre has been approved by China's Ministry of Railways to undertake the container and full truckload business transfer from the Guiyang Eastern Railway Station, Xinhua reports.
According to the development plan, the facility has a container cargo capacity of 10.54 million tonnes, and will be upgraded to 12.7 million tonnes in long term. It also has a bulk capacity of 8.13 million tonnes, which will be upgraded to 11.8 million tonnes over time, said the report.
The facility is divided into three that includes a container freight yard and two bulk handling sections. It will eventually cover 160.2 hectares with an overall capacity of 24.5 million tonnes.
Being the largest cargo distribution facility in southwest China, the facility currently covers 100 hectares and can handle up to 100 rail carloads a day. It is also one of the 40 railway container depots in China.
Source Shipping Gazette - Daily Shipping News
THE Atlanta office of UK-based SBS Worldwide has launched three consolidation services with weekly departures from Shenzhen, Hong Kong and Shanghai to New York.
The SBS simplified consolidation services are designed to meet the needs for transparent pricing and fixed-weekly sailings with reliable transit times, said a company statement.
"Most weekly consolidation services from China to the US transship are via Hong Kong. By offering consolidation services from Shenzhen and Shanghai directly to New York, we are able to remove a transport leg, which reduces lead times and makes the service more cost efficient," said SBS Worldwide chairman Steve Walker.
"The fact a transport leg has been removed also increases the reliability of service as the risk of goods being delayed in transit are lessened," said Mr Walker.
New services also reduce the risk of cargo being damaged during transport as product is only handled once at origin, compared with services that tranship via Hong Kong where cargo needs to be re-loaded, the company said.
Source Shipping Gazette - Daily Shipping News
INTTRA, a provider of e-commerce solutions for the ocean freight industry, is hosting this year's Transpacific Maritime Conference (TPM) this week in Long Beach, California, where participants have been invited to join a special breakout session on "Enhancing Collaboration through Performance Measurements."
The session will be led by Milan Vaclavik, director of product management at INTTRA and Lars Jenson, CEO of SeaIntel Maritime Analysis, who will share insights on carrier and shipper performance and how a revolutionary business insights platform from INTTRA, OceanMetrics, is enabling a new conversation on accurate, real-time performance metrics in order to move the industry forwards.
The company said this year's event promises to deliver an in-depth look at current issues in emerging sourcing and consumer markets in Asia, China's role as the leading source of US container goods and more.
Measuring performance of carriers, shippers and trading partners across the ocean supply chain is integral to improving and optimising workflow. However, a key challenge among the industry has been the absence of a standard set of metrics with a common set of data.
Mr Vaclavik and Mr Jenson will provide an overview of how shippers and carriers can better collaborate using common information and an agreed set of metrics available through OceanMetrics, which is powered by transactional data that represents more than 15 per cent of global ocean container trade, the company said.
Source Shipping Gazette - Daily Shipping News
DACHSER Transport of America has announced that its parent company has started building a new branch office in Zevenaar, the Netherlands, to cope with soaring volume.
The facility is expected to start operations this summer and will be one of the group's largest branch offices in Europe, a company statement said.
The 30,200-square-metre logistics complex is being constructed in multiple stages on a 20-acre site. "The volume at the Zevenaar location has soared in recent years," said Aat van der Meer, managing director for the Netherlands.
"As a result of this growth, we have outgrown our present site." With the new complex, the logistics provider expects to further the global reach of its warehousing and contract logistics activities and to increase access to worldwide markets. The new facility will also be located closer link to global procurement and distribution channels, it said.
"This expansion further supports growth of our network overseas and therefore only helps to expand the capabilities we offer American clients and their global partners," said Frank Guenzerodt, the company's US president and CEO.
The first construction phase will develop a 7,200-square metre cross-doc with 82 bays as well as a three-story office building. Following completion of the first phase, the office expansion will include the construction of an additional 3,300-square metre cross-doc and a 16,100 square metre warehouse.
Source Shipping Gazette - Daily Shipping News
QUALITY initiatives commenced last year by the London-based St Kitts & Nevis International Ship Registry (SKANReg) have led to a major improvement in Port State Control inspection results, which show that detentions were down 62 per cent and deficiencies had dropped 49 per cent.
SKANReg is now seeking support for further progress in a submission to the International Maritime Organisation's Flag State Implementation (FSI) sub-committee ahead of its 20th session from March 26-30. The registry says it is a "source of frustration" that, with only a small number of ships operating within certain regions, even a single detention can result in targeting of its ships and adversely affect its PSC list ratings in some areas. It is suggesting a harmonised system of reporting PSC statistics to avoid distortions.
The proposal comes as SKANReg - operational since 2005 - steps up its bid to attain PSC Grey List status within the next one to two years and White List ranking within two to four years from now. As part of this drive, the registry has successfully applied to the Voluntary IMO Member State Audit Scheme and is due to be audited in the second half of next year. Technical assistance has been offered by several countries, notably Australia and Turkey.
The St Kitts & Nevis Government last month became the 23rd signatory to the Maritime Labour Convention 2006, which sets out new working and living standards for seafarers. The convention needs backing by 30 countries. However, it is expected to come into force shortly, after seven ratifications were received in the last six months.
As reported in its paper to the FSI sub-committee, SKANReg enhanced its regulatory oversight in 2011 with a string of new measures that slashed ship detentions and deficiencies in the three main PSC regimes where its 320 SOLAS vessels operate.
Registrar Nigel Smith says: "Our fleet is gradually becoming more diverse and sophisticated, but at the same time we remain loyal to owners and managers from developing nations who often operate older tonnage. This raises special challenges in maintaining standards, but it categorically does not mean there is any room for compromise on quality."
Source Shipping Gazette - Daily Shipping News
KENYA and Ethiopia have signed an agreement in Nairobi to build a rail link between Lamu with Addis Ababa to develop the Lamu Port-South Sudan Ethiopia Transport (LAPPSET) logistics corridor between the two countries.
China has begun feasibility studies to transform Lamu, some 300 kilometres north of Mombasa and 100 south of Ethiopia, into the largest port in East Africa, as part of their String of Pearls strategy, says Wikipedia.
Kenyan President Mwai Kibaki and Ethiopian Prime Minister Meles Zenawi, who signed the accords, also explored plans to expand bilateral trade, more particularly the removal of trade barriers which could unlock this "huge potential", reports London's Containerisation International.
"It is necessary to reconfirm border lines and sensitise the communities residing along the common frontier to ensure they understand where they can go and where they can't under the trade agreements between Kenya and Ethiopia," said the joint statement.
Lamu is the oldest inhabited town in Kenya, says Wikipedia. Its economy was based on slave trade until its abolition in 1907. Construction of the Uganda Railroad in 1901 started competition with the Port of Mombassa.
Source Shipping Gazette - Daily Shipping News
HONG KONG's Asia Airfreight Terminal (AAT), the airport's No 2 ground handler, has announced it handled 51,690 tonnes in February, up 23 per cent year on year.
Export cargo volume for February was 33,249 tonnes, up 27 per cent year on year while import cargo volume was 17,955 tonnes, up 18 per cent with transshipments coming in at 486 tonnes, down 14 per cent.
Cumulative export tonnage for January and February was 66,395 tonnes, down three per cent against the same period last year. Total import tonnage for first two months was 35,067 tones, up six per cent year on year, while transshipment cargo volume was 1,009 tonnes, a decline of 17 per cent.
Looking ahead, AAT general manager for corporate development Kenneth Yeung said: "In view of the slowdown in global trade, we can only be cautiously optimistic about the possible recovery later this year."
Source Shipping Gazette - Daily Shipping News
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