The world’s biggest container line will order new ships for the first time in four years as the industry shakes off its worst crisis in four decades.
Nils Smedegaard Andersen, the chief executive officer of A.P. Moeller-Maersk A/S, said the Danish company may focus on purchasing smaller vessels than it has bought in the past.
“The lower the oil price gets, the less benefit the larger ships offer,” he said in an interview from Copenhagen. “We’re not making long-term plans based on what the oil price is exactly today, but nevertheless we’re currently looking into what effect the low oil price should have on our vessel size.”
More at Bloomberg
The Lummi Nation is in a stand-off with SSA Marine over the plans to build a coal terminal at Cherry Point, adjacent to Lummi’s fishing grounds.
The U.S. Army Corps of Engineers is undergoing multiple evaluation processes to determine if a permit should be granted to begin construction of the Gateway Pacific Terminal.
After the Lummi Nation wrote a 77-page resolution to the Army Corps requesting the permit for the terminal be denied, SSA Marine wrote to the Lummi Nation, asking to negotiate, and the Lummi rejected the offer.
The Army Corps will not decide on what action to take until an Environmental Impact Statement on the area is completed.
More at the Western Front
From Hawaii News Now:
The Honolulu-based shipping company, reporting higher quarterly and annual profits Tuesday, revealed that port congestion led to more business for Matson’s China Express.
In economics, when someone loses, someone else wins. But it’s still astonishing to note that the West Coast longshore contract drama, which snarled shipping, helped Matson Inc.
“The company realized significantly higher freight rates in its China trade, reflecting the high demand for its expedited transpacific service, which was amplified by cargo availability delays experienced by other ocean carriers associated with port congestion on the U.S. West Coast,” said Matson CEO Matt Cox in the company’s quarterly earnings report.
The China Express works like this: Matson takes a ship which has hauled freight westbound to Hawaii and Guam, continues to China, visits several ports to pick up cargo, and sails back to Long Beach, Calif. It’s called the China Express because Matson’s ship sails faster than the massive containerships from Hong Kong, and it takes a more northerly course where the Pacific isn’t as wide. When it arrives, Matson has its own terminal at Long Beach, less congested than the major terminals that bore the brunt of port congestion over recent months.
More at Hawaii News Now
From a Port of Long Beach news release:
The Long Beach Board of Harbor Commissioners this week appointed port industry veterans Michael Christensen and Glenn Farren to newly created management positions to enhance cargo flow and service at the Port of Long Beach.
Christensen, who most recently was Deputy Executive Director at the Port of Los Angeles, was appointed Port of Long Beach’s Senior Executive for Supply Chain Optimization, reporting directly to Chief Executive Jon Slangerup. Farren, who was General Manager for Hapag-Lloyd America, will be Long Beach’s Director of Tenant Services and Operations, a new position created to emphasize the importance of relations with Port tenants.
More at the POLB web site
In an article titled ‘US West Coast ports busy, struggling with backlog’:
Most West Coast U.S. ports have been busy since Friday, when negotiators reached a tentative settlement in a nine-month labor dispute and work slowdown.
The cargo is moving again, but long-term problems at the ports must be addressed, said transportation analyst Tom O’Brien of California State University, Long Beach.
“The fact that we have larger ships coming now, that is creating peak demand for labor and for equipment is putting a lot of pressure on our infrastructure, not only the ports, but the road network, rail capacity, distribution center and warehousing,” he said.
O’Brien said it all needs to be ramped up to meet increasing trade needs in the future.
More at Voice of America
In March 2013, ILWU delegates stood in solidarity with the Maritime Union of New Zealand against outsourcing and anti-union tactics employed by POAL. Pictured: MUNZ officers Joe Fleetwood and Garry Parsloe, with ILWU International Vice President-Mainland Ray Familathe in the center.
Good news for New Zealand dockworkers from the International Transport Workers’ federation:
The International Transport Workers’ Federation (ITF) is joining its affiliate the Maritime Union of New Zealand (MUNZ) in celebrating the signing of a new collective agreement for workers at the Ports of Auckland.
MUNZ had been locked in a dispute with employer Ports of Auckland Limited (POAL) since 2011 over a new collective agreement for wharfies, with strike and lockout action taken.
But in recent days, union members voted unanimously to ratify a new collective employment agreement with POAL. The deal has since been signed.
ITF president, chair of the ITF dockers’ section and national secretary of the Maritime Union of Australia Paddy Crumlin said: “This dispute goes way back to 2011 and I congratulate the Maritime Union of New Zealand and its members for sticking to their guns and staying strong in their quest for a collective agreement.
“It’s great to see that common sense has prevailed.
“This is a victory for the good guys.”
MUNZ National Secretary Joe Fleetwood said a resolution to the dispute was important for the workforce.
“This four-year dispute put enormous strain on workers and their families at Ports of Auckland and I’d like to congratulate them for their strength and resolve,” Mr Fleetwood said.
“I’d also like to thank the ITF and the international trade union community. There were rallies and actions of solidarity and support from right around the globe, including outside NZ embassies and consulates in support of the MUNZ struggle.”
MUNZ national president Garry Parsloe, who played a leading role in resolving the dispute and will retire at the end of next month, said: “The new agreement is a positive step for workers at the Ports of Auckland and it should ensure the continued success of the port going forward.”
Unifor says it has reached a tentative contract settlement with Canadian National Railway to avoid a lockout of 4,800 workers.
The Montreal-based railway had said it planned to lock out workers represented by Unifor unless the union agreed to binding arbitration to settle contract differences. However, Unifor president Jerry Dias had firmly rejected binding arbitration.
The union had announced plans to begin a strike vote next week after the failure of five months of negotiations.
More at the Toronto Star
In an article at the Huffington Post, author Robert Creamer writes:
Illinois Governor Bruce Rauner, who made $61 million in 2013 – or $29,000 per hour – proposed to eliminate funding for organizations that serve people with disabilities, children with autism, homeless young people, runaway teenagers, immigrants, after school programs, arts and foreign language programs, parent mentoring … you get the idea.
Illinois’ new GOP Governor, Bruce Rauner, will personally receive a $750,000 per year tax cut as a result of his decision not to continue the state’s temporary 1.25% income tax surcharge that expired last year.
His taxes were cut by an amount equal to the annual income of 14 families of four making the median income.
Rauner, who made $61 million in 2013 – or $29,000 per hour – is one of a small group of multi-millionaire speculators who would directly benefit enormously from lower state tax rates. … At the same time he and his friends get that big tax cut, Rauner’s new state budget promises draconian cuts in services that benefit the middle class and the poor.
Rauner proposed six billion dollars in cuts for state spending on universities, health care, local governments and pensions for state employees.
Rauner claims that his proposal is a “turnaround budget.” “Like a family, we must come together to address the reality we face. Families know that every member can’t get everything they want,” he said. Unless, of course, you are Bruce Rauner or one of his mega-wealthy friends.
Seems that the state can’t afford more childcare for working parents, but it can afford huge tax cuts for the very rich. … The fact is, of course, that Illinois – like most other states – are not in the midst of dramatic declines in economic performance that would require this kind of “belt tightening.” In fact, Illinois, like most of America, is wealthier today per person, than at any other time in its history.
The problem is that the wealthy have rigged the economic rules of the game to allow people like Bruce Rauner and the millionaires who got him elected to siphon off most of the wealth for themselves and leave middle income incomes flat.
More at the Huffington Post
Port of Portland's Terminal 6 is privately operated by Philippines-based ICTSI, which signed a 25-year lease with the port in 2010.
From an article titled ‘Problems continue at the Port of Portland’ in the Portland Tribune:
Only a few days after West Coast port operators reached a tentative contract agreement with the International Longshore and Warehouse Union, the operator at Port of Portland is accusing the ILWU local of engaging in an illegal work stoppage.
The tentative labor agreement was announced between the Pacific Maritime Association and the ILWU on Friday. But on Monday, ICTSI Oregon, which operates Terminal 6, said the local union is not making a good faith effort to increase productivity to acceptable levels there.
But Jennifer Sargent, a spokeswoman for the local IWLU union, said, “The statements that ICTSI made to the media about work stoppages were, as usual, self-serving and inaccurate. ICTSI arbitrarily fired entire crews of workers this week and then complained that no one was working. The fact is, ICTSI is failing to thrive in the United States because of its own managerial shortcomings, and desperately trying to blame others for its own mistakes. ICTSI’s poor decisions and rogue attitude have chased away two major customers in Portland and alienated their peers in the industry. If ICTSI spent as much time improving operations as they spend complaining to the media, our region would have a more productive container terminal by now.”
More at the Portland Tribune
Excerpts from a Journal of Commerce titled ‘Long recovery ahead for West Coast ports in aftermath of settlement’:
The tentative coastwide contract agreement that was reached Friday evening by the International Longshore and Warehouse Union and the Pacific Maritime Association, while most welcome, is just the beginning of a long process West Coast ports must endure to recover from the backlog of containers and vessels that have overwhelmed their operations the past four months, and to restore trust among shippers.
Industry experts agree that it will take months for Los Angeles, Long Beach, Oakland, Seattle and Tacoma — all among the 10 largest ports in the U.S. — to return to “normal” operations.
Even then, the old normal will not be good enough to accommodate the cargo surges that occur each week as vessels with capacities of as many as 14,000 20-foot containers descend upon West Coast ports. In fact, the brutal irony of the ILWU work slowdowns, and the PMA’s response of restricting night and weekend work, is that these actions compounded problems that were already occurring anyway because of the arrival of big ships operated by expanded carrier alliances.
More at the Journal of Commerce
From the Associated Press:
Negotiators reached a tentative contract covering West Coast dockworkers on Friday evening, likely ending a protracted labor dispute that snarled international trade at seaports handling about $1 trillion worth of cargo annually.
The five-year deal still must be approved by the 13,000-member International Longshore and Warehouse Union’s rank-and-file. They work 29 ports from San Diego to Seattle that handle about one-quarter of all U.S. international trade, much of it with Asia.
More from the Associated Press
FMCS, Cabinet Secretaries Played Key Roles
SAN FRANCISCO (Feb. 20, 2015) – The Pacific Maritime Association and the International Longshore and Warehouse Union today announced a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports. The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh.The parties will not be releasing details of the agreement at this time. The agreement is subject to ratification by both parties.
“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”
Craig Merrilees, ILWU, (415) 775-0533, ext. 113 (o), (510) 774-5325 (c)
Wade Gates, PMA, (415) 591-4080, firstname.lastname@example.org
Steve Getzug PMA, (213) 219-8990 (mobile)
From The Loadstar:
Aggressive scrapping, a dearth of newbuilds and port congestion has given the Panamax containership sector a welcome boost and pushed daily charter rates to their highest level in four years.
Meanwhile, the current port congestion crisis afflicting the US west coast is providing a further boost to the sector. Although Panamax ships have mostly given way to 6,000-10,000 teu units in the transpacific trade, the current delays to mainline vessels has opened up the market for supplementary ad-hoc charters for the transpacific, and for cargo diverted to the US east coast which sails via the Panama Canal.
Spot freight rates from Asia to the US east coast have climbed to over $5,000 per 40ft – more than double the market rate for the US west coast – as shippers seek to overcome the substantial business-threatening delays of containers stuck on ships and congested quays at Los Angeles, Long Beach and Oakland.
More at The Loadstar
From the Maritime Union of Australia:
Port privatisation will short-change Territorians and result in job losses, according to the Maritime Union of Australia.
MUA Northern Territory Branch Secretary Thomas Mayor urged Adam Giles to reconsider his stance on port privatisation, adding that selling, or leasing profit-making assets was a short-sighted mistake that would cost tax payers well into the future.
Yesterday, Mr Giles made a statement hailing the successes of other formerly owned Government companies.
“Well I’m no expert on Qantas, or Queensland Rail but I do know that the privatisation of Australian ports has been nothing short of scandalous,” Mr Mayor said.
“Port privatisation has resulted in the loss of millions of dollars of public revenue, community interest agreements are in some cases not being adhered to, and port jobs have been lost.
Mr Mayor said that Flinders Ports, which was sold by the state of South Australia on a 99-year lease for $186 million in 2001, last year it had a profit of $25 million and dividends of $22 million, which would pay off the original sale price in less than four years.
“That’s 94 years whereby the people of South Australia are missing out on millions of dollars,” he said.
“I’d rather that $47 million went into building schools and hospitals in the Territory, rather than into the pockets of some overseas interest.”
The MUA has entered a submission into the Senate Inquiry on Port privatisation which has found beyond revenue and job losses that port fees for both shipping and stevedoring companies have increased significantly.
“It’s not only us opposing port privatisaion, in fact we find ourselves standing in solidarity with our old foes at Patrick,” Mayor joked.
Asciano, Patrick parent company, chief executive John Mullen has been very vocal in raising alarm about the privatisation of ports.
In the Australian Financial Review, Mr Mullen asked in light of the New South Wales ports privatisations what the Government wanted a port to be:
“Is it just something that sells, you get your dollar, and then have the new owners extract the maximum possible rent? Or is it actually a gateway, a facilitator of trade for your state? I mean, you maximise the rent, ultimately the exporter and the importer pays,” Mr Mullen mused in 2013.