The Cargo Letter

Section A: Section: Trade, Financial & Inland News|
Section B: FF World Air News |
Section C: FF World Ocean News | Section D: FF in Cyberspace |
Section E: The Forwarder Broker World

OUR "C" Section: FF World Ocean News

FF World Ocean Briefs

• ILWU & PMA -- At The Brink ........ as the Bush administration is encouraging the parties to reach an agreement before their contract expires July 1 evening and avoid a work slowdown or strike at U.S. West Coast ports. The contract between about 10,500 members of the Int'l Longshore & Warehouse Union & the Pacific Maritime Assn. controls the flow of goods through the nation's 29 major Pacific ports. Last year, that trade amounted to US$260Bn in cargo. The contract expires at 8 p.m. EDT July 1. The union has not voted to strike, but the talks are not thought to be going well. In 1999, longshoremen kept working past a contract deadline & a contract was settled after 2 weeks. But they struck in 1936-37, 1948 & 1971. The White House would not say whether President Bush would intervene should negotiations break down. The Taft-Hartley Act allows a president to block a strike for 80 days if a dispute in a substantial segment of an industry will "imperil the national health or safety." Congress could impose a settlement. Bush hasn't been shy about preventing strikes, intervening in 2 airline labor disputes. In Dec, Bush signed an executive order 1 day before a strike deadline, imposing a "cooling-off" period between United & its mechanics. In March 2001, Bush intervened 4 days before Northwest mechanics' strike deadline, barring a walk out. An agreement was later reached. At American Airlines, just hours before Bush planned to block a strike by flight attendants in June 2001, both sides came to agreement. NOTE: Vancouver, Canada's largest maritime gateway said it will give priority to current customers over diverted cargo in case of a job action by dockworkers at U.S. West Coast ports.
• Teamsters Union In Solidarity With Longshoremen ........ as the union has entered into a coalition with the ILWU & the Int'l Longshoremen's Assn. to "make ports wall-to-wall union, and to provide mutual aid in times of struggle." "The ILWU is in tough negotiations for a new contract on West Coast ports, & the Teamsters union has pledged its support," the union said. The Teamsters have attempted to organize port drivers for the past 2 years. The union said port drivers are the some of the lowest paid workers in North America, earning about US$7 to US$8 an hour before taxes. There are more than 40,000 owner-drivers moving cargo in & out U.S. seaports. Coming Attractions? >> The Int'l Longshoremen's Assn. has confirmed on that its Local 1964 is attempting to unionize about 120 clerical & office employees of Evergreen America, based in Morristown, NJ. The ILA's pitch to Evergreen America's employees is the union's 1st effort since to organize office personnel of shipping lines whose vessels call at ports within the ILA's jurisdiction. Might we see ports, trucks, ocean carriers -- all in the ILA, ILWU & Teamsters?
• US$92.3M In Federal Grants For Seaport Security ........ as U.S. transportation secretary Norman Mineta has announced award of US$92.3M in grants for port security. The funding — which will be spread across 51 ports around the country — is modest at best, though port officials in New York expressed satisfaction with their allocation of US$9.3M. According to DOT, grants totaling US$78M will fund enhanced facility & operational security; grants for US$5M will be set aside for ports to assess security; & US$9.3M will fund research for new technology for maritime security. Fiscal year 2002 supplemental appropriations bills passed by the U.S. House & Senate also include additional funds for port security grants. The House passed its version May 24 with provisions of US$75M for additional security grants. The Senate Appropriations Committee passed its bill June 7 with legislation calling for US$200M in security grants. Additionally, the "Maritime Transportation Antiterrorism Act" authorizes US$249M over 3 years for federal grants to help ports enhance security. Senate bill, S.1214, calls for US$390M in grants over a 5 year period.
• The New U.S. Coast Guard ........ as it has awarded a US$17Bn contract to Integrated Coast Guard Systems, a joint venture of Lockheed Martin & Northrop Grumman for new ships, aircraft & communications equipment to help guard U.S. shores against a terrorist attack. The new fleet & equipment will allow the Coast Guard to stop ships away from the U.S. coastline; instantly run lists of crew members & cargo shipments through intelligence databases; and check for biological, chemical or radiological materials. Known as the "Deepwater Program," it is the largest contract ever awarded by the Coast Guard. It may run for as long as 30 years as the Coast Guard buys up to 91 ships, 35 fixed-wing aircraft, 34 helicopters & 76 unmanned surveillance aircraft -- with upgrades to 49 ships & 93 helicopters. Some of the ships to be replaced date as far back as World War II.
• U.S. Coast Guard Wants It Permanent ........ as it has proposed to make permanent its 96-hour advanced notice for all cargo ships arriving in the nation's ports. The 96-hour advanced notice for vessels greater than 300 gt. was imposed by the Coast Guard shortly after the Sept. 11 terrorist attacks. Vessel arrivals used to be required 24 hours in advance. Coast Guard also proposes to consolidate the notice of departure & notice of arrival; require electronic submission of cargo manifest information to Customs; & require additional crew & passenger information. Coast Guard will take comments about its proposed rulemaking from the industry through Aug. 19.
• FOC Watch ........ as the U.S. House Armed Services Committee is concerned that certain ship registries, or so-called "flags of convenience," serve as easy conduits for terrorist activities. In particular, the committee believes there's sufficient evidence to link the 2nd-largest flag of convenience, the Liberian Int'l Ship & Corporate Registry, to funding Liberian President Charles Taylor. According to a UN report, the Liberian ship registry accounts for about 50% to 75% of Liberia's annual revenue. U.S. maritime officials & labor groups expressed similar concern about the lack of operational controls of open registries. According to the U.S. Maritime Admin., from 1980 to 1998, countries with developed economies, such as the U.S., Japan & Western Europe, lost about half of their general vessel tonnage to open registries, such as Liberia, Panama, Cyprus, the Bahamas, & Malta. These registries account for 60% of world merchant fleet capacity. "We urge the U.S. Congress on a unilateral basis to enact legislation authorizing the U.S. Coast Guard to refuse entry to U.S. ports to any foreign-flag vessel that does not provide full identity of the vessel's beneficial owner," said the Seafarers', Fisheries & Inland Navigation Section of the Int'l Transport Workers' Federation.
• Black Flags ........ as the Paris Memorandum of Understanding on Port State Control, government group of 19 maritime nations, has published its annual ranking of flags that have a high proportion of substandard ships. For 2001, the group listed 25 flags on its "black list" following 18,681 inspections carried out during 2001 by member states. The "Black list" flags in the latest report are: Albania, Bolivia, Sao Tome & Principe, Honduras, Algeria, Lebanon, Georgia, Cambodia, Syria, Turkey, Belize, Libya, Tonga, Romania, Morocco, St. Vincent & Grenadines, Egypt, Ukraine, Malta, Panama, India, Cyprus, Azerbaijan, Bulgaria & Russia.
• UN Award For Containership ........ as the 27 crew & owners of the Norwegian freighter M/V Tampa have been presented a U.N. prize for their daring high seas rescue of 438 asylum seekers. The US$100,000 Nansen Refugee Prize from the UN High Commissioner for Refugees also cited the crew's courage & determination in an 11-day standoff with Australia over landing mostly Afghan refugees on its soil. The vessel was diverted to rescue the 438 from a sinking ferry in the Indian Ocean last Aug, even though the ship & crew did not have the capacity to care for that many people. Australia faced Int'l condemnation for refusing to accept the refugees & for sending troops to board the Tampa. The asylum seekers were finally transferred to an Australian warship & taken to New Zealand & Pacific Island nation of Nauru.
• Crying Foul ........ as in a closed-door meeting June 26, the U.S. Federal Maritime Commission decided to extend its consideration of a petition filed by the National Customs Brokers & Forwarders Assn. of America & the Int'l Assn. of NVOCCs to investigate alleged anticompetitive contracting practices of the Transpacific Stabilization Agreement. The groups said TSA carrier members have refused to negotiate with intermediaries or shippers' associations until after they have created their contacts with direct shippers. The industry groups said this results in higher rates for non-direct shippers. They also said the TSA's actions violate the 1984 Shipping Act. The groups seek TSA member lines to pay reparations pursuant to section 11(g) of the Shipping Act to intermediaries which have been damaged.
• Transpac Fuel Pump ........ as the Transpacific Stabilization Agreement carriers plan to increase fuel surcharges on eastbound transpacific containerized shipments on July 1. For the 3rd quarter, the fuel surcharge will be set at US$180 per 45-foot container, US$160 per high-cube 40-foot box, US$140 per 40-footer, US$105 per 20-footer & US$3 per revenue ton by weight or measure. The carriers said the increase is "in response to significantly increased costs of purchasing and loading marine fuel in the U.S. & Asia." TSA member carriers are APL, CMA CGM, COSCO Container Lines, Evergreen, Hanjin Shipping, Hapag-Lloyd, Hyundai, "K" Line, Maersk Sealand, MOL, NYK, OOCL, P&O Nedlloyd & Yang Ming Marine.
• Not This Year ........ as Singapore's flagship maritime event, "Asia Pacific Maritime," has been postponed for a year due to pressure from exhibitors & other participants. The exhibition & conference, successor to "Singaport", will now be held from March 24 to 26, 2004. A spokesman said that the move was is in response to requests from exhibitors, national groups & partner organizations who feel that holding an event in 2003 may be "too soon" in view of current market sentiments.
• Now Everyone's A Forwarder ........ as Taiwan-based Evergreen Marine Corp. will widen its activities by adding forwarding & other logistics operations. In China, South East Asia, the Indian Subcontinent & South America Evergreen with invest in forwarding operations, container depots, warehousing & trucking. Unlike other shipping groups, like A.P. Moller/Maersk, APL, P&O Nedlloyd & Mitsui O.S.K. Lines, Evergreen had not moved into the logistics field beyond container shipping. The carrier has operated some container depots & trucking activities. In some instances, it has relied on its local agents to provide forwarding or other additional activities for customers. Container cargo volume for the carrier declined by 8.5% in 2001, while freight rate revenues dropped by 14.7%.
• Major Container Shift ........ as Evergreen Marine has completed an internal assessment into how many containers it should transfer as part of the relocation of its southeast Asian center from Singapore to the rival Port of Tanjung Pelepas (PTP) in Malaysia's Johor state, as announced earlier this year. The volume, according to one Malaysian report, would be about 80% of the yearly throughput in Singapore, suggesting an equivalent of 960,000 of the 1.2 million TEU. The balance of 240,000 TEU in Singapore has to do with joint services with other carriers and with Asia-Australia service strings. Evergreen's decision to keep 20% of its business in Singapore could possibly reflect a counter-challenge from Singapore's PSA to stop, with special offers and dedicated terminal facilities, & more carrier desertions.
• Newest MSC Vessel ........ as the U.S. Navy has transferred USS Arctic , a fast combat support ship, to the operational control of Military Sealift Command. Arctic went from a Sailor-crewed combatant ship to a civilian-crewed, noncombatant ship during a ceremony held June 14 in Earle, NJ. The ship, now known as USNS Arctic to designate her new status as part of the Navy's Military Sealift Command, will join more than 30 other civilian-crewed MSC ships that provide at-sea logistic support to the Navy fleet. Two more ships, USS Rainier & USS Bridge, are scheduled to be reassigned to MSC's control in the next 2 years. When they are, the Navy will realize an estimated annual savings of US$75M in operating costs. Arctic, which as a Navy ship was crewed by a complement of 544 sailors, will now have a civilian crew of 176 mariners, accompanied by a small military department of 28 Sailors for support & supply coordination.
• Throughput. ........ Port of Long Beach reported an 18% jump in loaded inbound containers handles in May, to 231,382 TEUs (total container volume, including empties, rose 16.4% to 428,033 TEUs).
  Port of Los Angeles reported a 22% rise in loaded inbound containers handled in April, to 258,026 TEUs (total including empties handled 484,299 TEUs) -- port has adopted US$497.9M budget for the fiscal year 2002-2003 that focuses on security & priority issues, up 11%..
  Freight traffic through all UK ports in 2000 rose by 7.4m tons (1%) to 573.1m tons, with inward traffic up 3% to 316.3m tons & outward traffic down 1% to 256.7m tons.
  Malaysian ports rose 22% to 2.6 million TEU in 1st quarter of 2002.
  Port of Vancouver has record box shipments in the 1st 5 months of the year, reaching a total of 522,840 TEU, a 15% increase over same period last year.
  
  "The essence of flexibility is in the mind of the commander; the substance of flexibility is in logistics." ---Rear Admiral Henry Eccles, U.S. Navy