NETHERLANDS based CEVA Logistics has posted a 9.9 per cent increase in operational profit of EUR321 million (US$422 million) in 2011, drawn on record revenues of EUR6.9 billion, up 0.7 per cent year on year.
Ocean freight volumes increased 17 per cent. The company has since increased staffing to launch a new less than container load (LCL) service.
In early 2012, the group completed a "transformational equity and debt funded financing", which eliminated over EUR850 million of debt, strengthened the balance sheet, and positioned CEVA well for future growth.
"We improved our financial performance substantially in the first half year and have maintained top line performance in a more challenging economic environment in the second half," said CEO John Pattullo.
"Our recent transformational financing has strengthened our balance sheet and positions us well for profitable growth in the future," said Mr Pattullo.
In a statement the company said it expects economic uncertainty in the coming year. "We have identified and prioritised actions to continue to strengthen our business model, even with this external background, and build our market position so that we outperform our peer group in 2012."
Source Shipping Gazette - Daily Shipping News
US SENATE and House committees have introduced a protectionist bill to counter a "deeply flawed" court ruling to limit the Commerce Department's power to apply countervailing duties on goods from China and Vietnam.
Last December, the Court of Appeals found, in GPX vs United States, that US law prohibits the federal Commerce Department from applying countervailing duties (CVD) to "non-market economies".
"This legislation overturns that deeply flawed decision," said the US Commerce Department and US Trade Representative in a joint communique, reported American Shipper, adding that the bill was also praised by the White House.
Said Commerce Secretary John Bryson: "This bill would ensure the 24 existing CVD [countervailing duties] on imports from China and Vietnam remain in place and that ongoing CVD investigations involving imports from these countries continue."
"If Congress does not take up this bill, the Commerce Department may lose a critical tool to level the playing field for American workers and companies in the future," Mr Bryson said.
Said US Trade Representative Ron Kirk: "This has been a major focus and priority for the Obama Administration, which has been working closely with Congress to produce this legislation as quickly as possible."
Source Shipping Gazette - Daily Shipping News
THE president of Valencia port authority, Rafael Aznar, says a reduction in transhipment costs may be key to unlocking future investment in container handling facilities in the port, reports the UK's Port Strategy.
Noatum Terminal Valencia has yet to decide upon an opening date for its Muelle Costa extension, which has a capacity of handling up to one million TEU, despite already having invested EUR50million (US$66.1 million).
Meanwhile, Castellon port authority has reduced tariffs 70 per cent in 2012 as a means of slowing down the amount of ceramics traffic being lost to neighbouring Valencia.
At the same time, tariffs charged on empty containers will rise, although the cost of transhipment is expected to fall. Castellon is the centre for ceramics production in Spain, but the majority of this is exported via Valencia.
Source Shipping Gazette - Daily Shipping News
ABU Dhabi Ports Company (ADPC) has received the first batch of super post Panamax ship-to-shore (STS) container cranes at Khalifa Port.
The three massive STS cranes, which are 44 metres high under the spreader and capable of lifting 110 tonnes, are designed and constructed by Shanghai Zhenhua Heavy Industries Co Ltd. The second batch of three cranes is scheduled for delivery in the second quarter.
By the fourth quarter, the flagship facility will be the first semi-automated port in the region, capable of initially handling two million TEU and 12 million tonnes of general cargo annually, a company statement said.
"I am tremendously proud to be a part of this instrumental project, which will play such a key role in Abu Dhabi's economic development," said Ahmed Al Jaber, chairman of ADPC. "Ports in the UAE account for 61 per cent of the trade volume among GCC countries. With this fast-paced growth, ports are striving to be more competitive and productive for their customers."
Khalifa Port is said to have been designed to accommodate the largest containerships currently at sea and those planned for the future. By 2030, the port will be able to handle 15 million TEU and 35 million tonnes of general cargo a year.
Source Shipping Gazette - Daily Shipping News
CHINA Southern Airlines has inaugurated an all-cargo service from its Guangzhou base that flies to Qingdao and then to Los Angeles, shortening transit from Qingdao to LA to 12 hours, Xinhua reports.
The new service uses Boeing 777-200 freighters, offering two flights per week on Mondays and Thursdays that takes off at 0345 hrs from Guangzhou, leaves Qingdao at 0850 and reaches LA at 2035 Beijing time. Shipments can be carried to 85 cities across North America via the air-truck intermodal service.
This is the second inter-continental cargo flight service from Qingdao. The first is also to LA, operated by mainland China-based Yangtze River Express Airlines.
Lufthansa will also launch an all-cargo service from Qingdao via northeastern city Shenyang to Frankfurt in March. Besides, Korea Air, Asiana, All Nippon Airways and Dragonair are also going to increase their frequencies from Qingdao.
Source Shipping Gazette - Daily Shipping News
CHINA Postal Airlines, the air carrier of China Post, plans to start a scheduled all-cargo service from the northern city of Shijiazhuang to Korean capital Seoul at the end of the March, Xinhua reports.
The service will offer three flights a week on Monday, Wednesday and Friday, using Boeing 737-300 freighter that can carry up to 17 tonnes.
An unidentified official at Hebei Airport Management Group disclosed that the China Post Hebei office also plans to set up a northern China distribution centre at the Shijiazhuang Airport.
Source Shipping Gazette - Daily Shipping News
STAGNATION in volumes from China's electronics has damaged the country's air cargo sector.
But the 17.4 per cent fall export growth, because of falling demand from the US and Europe as well as the 23 per cent decrease in electronic imports did not hurt revenue which increased 11 per cent year on year to US$468 billion.
The electronics sector, of which computers and mobile phones are the top two exports, account for 35 per cent of China's total export value, noted the UK's Transport Intelligence.
Although airports and airlines experienced export and import declines, contributing factors in slack demand for air cargo carriers were marked by decreases in high-value goods shipped as well as a possible shift from air freight to ocean freight for such shipments.
Hong Kong Air Cargo Terminals (Hactl) has experienced a nine per cent decreases in exports and an 8.8 per cent fall in imports, with overall volumes holding steady being of rising transhipments to a total of 2.7 million tonnes.
Hong Kong's flag carrier Cathay Pacific and its sister airline Dragonair reported a drop in tonnage for the region of 8.6 per cent. Taiwan's biggest carrier of China Airlines is to park its third Boeing 747 freighter due to slackening demand while Singapore Airlines is struggling with 2011's final quarter bleeding losses of $32 million missing break-even factor which was inflated by higher operating costs and lower rates.
The latest figures of 4.5 per cent inflation for China might be off mark given the double digit growth against a drop in tonnage of six to eight per cent. The results of air cargo carriers' performance in March will answer this in accurate year on year comparisons, said the report.
Source Shipping Gazette - Daily Shipping News
SOUTHERN California Logistics Airport (SCLA) near Victorville, some 40 miles east north east of Los Angeles on the edge of the Mojave Desert, is gaining international interest as a dedicated link to airports in Canada and Europe, says the assistant city manager.
SCLA, also known as Victorville, has resurrected hopes to become an air cargo hub since trade has picked up following recession, said assistant city manager and director of SCLA Keith Metzler, aided by its work with aviation consultant Claasen Group International.
"The goal has been in place really since SCLA started," said Mr Metzler, it's distinct advantage from competitor Los Angeles International Airport (LAX) is in speed of handling. "We're dramatically quicker," he added.
Though Victorville will face a challenge in luring traffic from more congested Los Angeles International Airport, Mr Metzler believes SCLA lack of restrictions for perishable goods and expensive equipment is attractive for customers.
The Claasen Group hopes to gain traffic from confidentiality agreements already in place with a number of companies, said its owner Johan Claasen, which would in turn benefit his maintenance and repair company based at SCLA, of which he is chairman and CEO and generate employment to the airport.
The Victorville city council will vote on the airport's agreement with Clausen shortly and should it be approved the company will have exclusive rights to negotiate a deal for the next six months, with the option to extend for an additional six.
Source Shipping Gazette - Daily Shipping News
Finnair has appointed Juha Järvinen as Managing Director of its cargo companies, Finnair Cargo Ltd. and Finnair Cargo Terminal Operations Ltd. as of May 14, 2012. Järvinen will also join Finnair’s Management Board, which comprises company management and personnel representation.
Finnair’ Cargo’s current Managing Director and Member of the Finnair Management Board Antero J. Lahtinen will retire this year. He will continue to work as a senior advisor during his successor’s induction period.
Juha Järvinen has extensive experience in managing different services within the airline industry, most recently as the Vice President, Ground Handling International in SAS Scandinavian Airlines.
In line with Finnair Group’s Asia strategy, Finnair Cargo is specialized in air cargo traffic between Europe and Asia. Finnair Cargo transports over 120 million kilos of air freight annually with both freighters and in the belly hold of wide-body passenger aircrafts.
Source Finnair Plc
Montreal - The International Air Transport Association (IATA) called upon Canada’s policy makers to take actions to improve the competitiveness of the country’s aviation sector including reducing the heavy tax burden.
“Canada is home to leading global aviation organizations including IATA, the International Civil Aviation Organization (ICAO) and Airports Council International (ACI), and has one of the world’s most important aerospace sectors. Yet government policies including a high tax burden hamper aviation’s ability to serve as an even greater catalyst for economic growth and jobs creation,” said IATA’s Director General and CEO Tony Tyler in an address to the Montreal Council on Foreign Relations.
Tyler compared Canada’s aviation sector with Australia’s, a country with which Canada shares some characteristics in terms of geography, resources, demographics and other areas. According to country studies conducted on behalf of IATA by Oxford Economics:
Aviation directly contributes 2.2% of GDP for Canada but 2.6% for Australia.
If catalytic benefits through tourism are included, GDP contribution rises to 2.8% for Canada—and to 6.1% for Australia.
Canada’s population is around 50% larger, but Australia has more air travel: 78 million passengers travel to, from and within Australia, compared to 71 million for Canada.
“There is one statistic, however, where Canada wins hands down over Australia: aviation’s contribution to taxes. It is about 19% higher in Canada, excluding the impact of domestic taxes on fuel. Were fuel to be included, the difference would be even greater, since Canadian fuel taxes are about double the amount for Australia,” said Tyler.
“The Crown rent charged for Canada’s airport infrastructure is a CAD 250 million annual competitive disadvantage. The pain is not only felt by the Canadian air transport sector which suffers from passengers opting to start their journeys from US airports. Every business that relies on connectivity shares the burden. That is not all. The burden also includes Property in Lieu of Taxes and some of the highest security fees in the world—which can be up to ten times those charged in the US,” said Tyler.
Despite these competitive disadvantages, recent developments provide reason to be optimistic that Canadian policy makers are starting to view aviation as a strategic asset. “The announcement by the government of British Columbia that it is proposing to do away with the provincial tax on international jet fuel from next month is excellent news. In another positive development, Transport Canada has initiated a stakeholder consultation on key policies affecting the competitiveness of the aviation industry. I urge the Minister of Transport, Infrastructure and Communities Denis Lebel to include a look at the impact of aviation taxes in this review. It is important that this consultation process develops consensus on a coherent national aviation policy that supports improved competitiveness in recognition of the catalytic impact of air connectivity on economic growth and development,” said Tyler.
Taking a global context, Tyler made special mention of the important role that Montreal plays in the key areas of safety, security and environment.
Safety: “Aviation safety is built on global standards. And these standards are built in Montreal. Today IATA announced that in 2011, the global accident rate for Western-built jets was the lowest in history. Last year 2.8 billion people flew safely on 38 million flights. This amazing performance is a testament to the strength and commitment to aviation safety by the stakeholder community through global standards,” said Tyler. The accident rate for Western-built jets was 0.37 hull losses per million flights or one accident for every 2.7 million flights which represents a 61% improvement over the last decade.
Security: “A Declaration on Aviation Security was unanimously agreed upon at the last ICAO Assembly in 2010. Building on that commitment to cooperate to improve global security, IATA has been working closely with ICAO, Interpol and states to improve the airport checkpoint and eliminate the long lines, unpacking, disrobing and intrusive searches that too often characterize today’s checkpoint experience,” said Tyler.
IATA has proposed a Checkpoint of the Future that combines differentiated screening powered by passenger information that is already being collected for immigration purposes with technology solutions that allow passengers to walk through checkpoints without stopping or unpacking. The Checkpoint of the Future already has support from major stakeholders such as the European Commission, the Chinese Government, the US Department of Homeland Security and Interpol.
Environment: “Through ICAO, the Montreal aviation nexus played a central role in achieving a balanced approach to aviation noise a decade ago. Now Montreal needs to play the leading role in resolving the global dispute over the European Union’s Emissions Trading Scheme. Through the leadership of ICAO, a set of principles for market based measures is already agreed. And there is a commitment to deliver proposals for a global scheme by the next ICAO Assembly, which is only a year-and-a-half away. I believe that Europe is coming to the understanding that a global solution is what is needed. Indeed, I repeat my call for Europe to be a sincere participant in making the ICAO process successful,” said Tyler.
IATA has made its global headquarters in Montreal since it was incorporated by a special act of the Canadian Parliament in 1945.
IATA
THE container shipping industry is consistently destroying shareholder value and needs to rein back fleet growth to improve returns, says Maersk Line's new CEO Soren Skou.
Mr Skou, who took over in mid-January, made the comments in London shortly after parent company, AP Moller-Maersk, announced a net loss of US$537million from its container activities division in 2011, against a $2.64 billion net profit the previous year.
Nils Andersen, AP Moller-Maersk's chief executive, has accepted that Maersk helped to accelerate last year's industry-wide fall in rates by introducing a daily service from the main Asian ports to the main northern European gateways, reported London's Financial Times. The Daily Maersk service considerably increased ship capacity on key trade route at a time of already weakening demand.
But Mr Skou said Maersk had captured enough market share to fill the extra capacity and now needed to improve profitability.
"We were particularly pleased to see the uptick we had in volume after we launched," he said. "On the volume, we're where we need to be in order to be competitive. Now it's about trying to get better paid."
Mr Skou pointed out that ocean liners had achieved, on average, operating profit margins of just two per cent over the past seven years and only earned "acceptable" margins of 12 per cent in 2010.
The new chief executive, who was previously CEO of Maersk's tanker division, refused to say what level of returns the industry should seek, but said: "What I can say is that, unless we get industry returns up to eight or nine per cent, we're definitely destroying shareholder value."
The Danish shipping group could do nothing to control the reaction of the other carriers to the rate slump, but would defend its market share if necessary by cutting prices, Mr Skou said.
But the shipping line would aim this year to grow by only the three to four per cent annual rate given the anticipated for demand to ship containers. The carrier has already cut capacity on its Asia to Europe services nine per cent in an effort to return to profitability.
He denied, however, that the shift represented a wholesale change of strategy. "In the last couple of years, in order to be able to offer, among other things, Daily Maersk, we have been growing significantly faster than the market," Mr Skou said. "The big change is really in our growth aspirations."
Source Shipping Gazette - Daily Shipping News
TAIWAN' s Evergreen Line is preparing to add an additional Far East-North Europe service through container slots purchased on the CKYH Asia-North Europe Loop 6 (NE 6) from the end of March, signalling the start of a broad Evergreen-CKYH alliance on the Asia-Europe.
The arrangement, announced in December, is expected to be extended to all of the Evergreen and CKYH strings, comprising Cosco, "K" Line, Yang Ming and Hanjin Shipping, on the route involving eight weekly Asia-North Europe loops and four weekly Asia-Mediterranean loops, to be implemented over April and May, reports Alphaliner.
It said a total of seven shipping lines will participate in the Asia-Europe loops, as part of a wider pact involving the four CKYH carriers with Evergreen, CSCL and UASC through various individual slot exchange arrangements with the latter three carriers.
The first Evergreen sailing on the NE 6 is scheduled to depart from Xingang on March 23 with the Hanjin Greece coinciding with the launch of a revised port rotation calling at Hamburg, Rotterdam, Le Havre, Algeciras (HT), Singapore, Hong Kong, Xingang, Kwangyang, Busan, Shanghai, Shenzhen-Yantian, Singapore, Algeciras (HT) and back to Hamburg.
The NE 6 will deploy 11 ships in the 10,000 to 13,000-TEU range under the revised rotation, compared with 10 ships of 8,200 to 10,000 TEU now deployed.
The average weekly capacity will increase 16 per cent from 9,350 TEU to 10,850 TEU by April. This service is also used by slot takers UASC (branding it AEC 9) and CSCL (branding it AEX 5). NYK, which currently takes slots on the NE 6, is expected to terminate the slot arrangement from April as it refocuses on its own participation on the rival G6 Alliance.
A wider revamp of the CKYH Asia-Europe services is expected to be announced within the next few weeks, with capacity upgrades expected, the report added.
Source Shipping Gazette - Daily Shipping News
THE latest report issued by Shanghai International Shipping Institute said that the world economic recovery is facing challenge brought by Euro-debt crisis. The world's port throughput growth this year is estimated to slow down to seven per cent.
But Asian ports will grow faster than those in the rest in the world with an increase at nine to 10 per cent. Shanghai and Ningbo are expected to have a steady growth at about 10 per cent.
The report points out that the emerging markets will account for an increasing percentage in the world trade. The gap of throughput growth between developed countries and developing countries will continue to widen this year. Rotterdam and Antwerp's growth is expected to be about five per cent.
In the meantime, growth gap between container and other kinds of cargo will narrow. Increase of containerised cargo will be about five per cent in the world and six per cent in Asia.
Last year, the world's throughput had an increase of 7.3 per cent, substantially down from 2010's 14 per cent. Chinese ports had brilliant results by taking up seven positions in the list of the world's top 10. Shanghai continues to stay as No 1 with a throughput of 720 million tonnes, up 10.3 per cent year on year. Ningbo-Zhoushan ranks second, Guangzhou is the fourth, followed by Tianjin. Singapore ranks at the third.
Boosted by fast-growing trade in emerging markets, the world's container shipping volume managed to maintain a rapid increase of 9.4 per cent last year. Far Eastern ports throughput kept a healthy increase while those in crisis-troubled western Europe were slowing down.
As for container throughput, Chinese port accounted for six in the world's top 10. Shanghai stays at the No 1 for the second consecutive year with 31.7 million TEU. Singapore ranked at the second with 29.9 million TEU. Hong Kong is the third with 24.2 million TEU. Shenzhen, Ningbo, Guangzhou and Qingdao are the fourth, sixth, seventh and eighth.
Source Shipping Gazette - Daily Shipping News
KOREA's Port of Busan may still be the fifth busiest container port in the world, but it beat all in growth of 2011 at 14 per cent, Shanghai's 9.2 per cent, Singapore's five per cent, Hong Kong's three per cent and Shenzhen's near zero growth.
Last year, Busan lifted a record 16.2 million TEU; next year the port expects to handle 17.5 million TEU by continuing to expand its role in global and regional transshipments, reports UK's Port Strategy.
"Busan's regional location is desirable in that it is sandwiched directly between China, the world's largest manufacturing base, and Japan," said Ho Chul Park, Busan Port Authority's marketing director.
"Its comparable low costs combined with this locality means Busan is the convenient and favourable choice for many Japanese shippers," he said, adding that success depends on location, connectivity and stability.
Busan is attracting more transhipments because it is has been proven to be more reliable, he said.
"Unlike many larger ports in other countries, Busan is very rarely affected by adverse weather conditions or fog. A port closed due to bad weather means extremely high excess fees for the shipper forced to wait until the port is re-opened, as well as disruption to global shipping schedules and routes," Mr Park said.
He expects Busan's three-pronged strategy will see its transhipment traffic as a proportion of total throughput rise from 45 to 60 per cent by 2020, a target that is being backed up by an extensive marketing campaign aimed at shippers.
Mr Park attributed the 17 per cent year on year volume increase for Far East destined cargo to the port's outreach to shippers as well as rising trade between Asian countries.
Cargo destined for Far East Asia constitutes some 32 per cent of container volume last year, while North American demand was responsible for 16 per cent, followed by Japan with 15 per cent, representing only a one per cent decline owing to earthquake and tsunami a year ago which devastated Japanese output.
Breaking down trade barriers also helped. A Free Trade Agreement was agreed with the EU in 2007 and with the US last year and liberalising trade talks could be finalised this year.
Four new berths at Busan North Port have been built bringing the total to 42. Original plans to build 30 berths at Busan New Port - 22 of which are already open - have been increased to 45 to be built in Busan New Port over the next six years. New rail connections and a huge new distribution park are also being built, while Busan North Port is being redeveloped.
Source Shipping Gazette - Daily Shipping News
GLOBAL Swiss forwarder Kuehne + Nagel posted a 0.16 per cent increase in profit to CHF606 million (US$665 million) drawn on revenues of CHF19.6 billion, a decline of 3.5 per cent year on year.
"Considering the market and currency turbulence, the diverging economic developments and the devastating natural disasters, which influenced the business environment in 2011, we achieved very satisfactory annual results," said K + N chairman Karl Gernandt.
The second half slow down for the company was attributed to cautious consumer and investment behaviour in the US and Europe, the interruption of supply chains following the disasters in Japan and the significant rise in commodity prices affecting logistics.
During the year, Kuehne + Nagel handled a record number of containers at more than three million TEU, a volume increase of 11 per cent which saw it grow twice as fast as the global container market.
The company experienced double-digit growth rates in Asian and non-European trades and even transpacific lanes volumes were up by more than 15 per cent despite market a contraction.
In air freight, tonnage increased of 13 per cent, exceeding expectations due to acquisitions in the perishables logistics sector, and greater sales of industry-specific air freight solutions. Particularly high growth rates were met in the export business from North America and on the routes from Europe to North America and Asia.
Expansion of groupage, full and part loads and industry-specific distribution led to an 18.8 per cent increase of net invoiced turnover in local currencies, said the company statement.
Groupage activities were boosted by the acquisition of British RH Freight Group in 2011, resulting in an above-market volume growth of 10 per cent. The takeover of the German Drude Logistik, Bad Hersfeld, was of high strategic importance and will ensure productivity improvements in the European groupage network.
By region, the Asia-Pacific recorded a gross profit increase of 8.5 per cent, and Middle East, Central Asia and Africa scored a 3.5 per cent improvement. In the Americas, gross profit improved by 2.2 per cent while in Europe, negative currency effects of 11.9 per cent resulted in a gross profit decrease of 2.9 per cent.
The company said it made "good progress" in expanding contract logistics activities in Asia and South America, while in North America it "achieved a significantly improved result through restructuring measures, the closure of unprofitable sites and newly gained business."
Said CEO Reinhard Lange: "We are confident to reach our targets in the current business year again with profitable growth above-market average in all business units. We are facing up to the uncertain economic development by consistent cost management, process optimisation and increased productivity."
Source Shipping Gazette - Daily Shipping News
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