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SEACARGO AMERICAS NEWSLETTER
NEWS IN THE AMERICAS

• DP World Buys Stake in Sao Paulo Port
• Maersk Challenges Rivals to Rate War
• Miami, Savannah & New York Lose Asia Services
• ECLAC: Hemispheric Trade and Investments to Plunge
• Panama Free-trade Zone Strike Protests Tax Hike
• US Peak Season Imports to Fall Nearly 20 Percent
• Fresh Quest Inc. Selects Port Manatee
• Port of Tampa Expects Revenue Boost
• Palm Beach Board Endorses Inland Port
• Port of Tampa Gets $2.2 Million Grant
• New, Free Global Port Directory
• IMF's Lipsky Sees "Clear", yet "Tentative" Signs of Global Recovery

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SAVE THE DATE……November 4-6, 2009

NEWS IN THE AMERICAS

DP World Buys Stake in Sao Paulo Port 
Container terminal operator DP World is entering the Brazilian market through a joint venture in a terminal near Sao Paulo, the company said Sunday. DP World, along with Brazilian conglomerate Odebrecht, have agreed to buy a majority stake in the Embraport project, a new facility that is scheduled to have 1 million TEUs of capacity by 2012. The terminal has been developed until now by Brazilian company Coimex, which has retained a stake in the terminal in the deal. Financial details were not disclosed.   

DP World said it would invest about $500 million in the first phase of the project. At full build out, the terminal will have capacity of 1.5 million TEUs. “This is an unparalleled opportunity to enter Latin America’s largest economy and establish a strong position on the East Coast, building on the network we already have in the region to expand our offering to our customers,” said Mohammed Sharaf, chief executive officer of DP World. “With strong origin and destination cargo, Embraport fits our business model well.” In South America, DP World operates terminals in Argentina and Venezuela.  http://www.americanshipper.com/NewWeb/FC/FLC_story.asp?news=139925

Maersk Challenges Rivals to Rate War
Maersk Line, the world’s largest on Aug. 24 warned rival ocean container carriers that it is prepared to fight a rate war to defend its market share.

"We won't allow anyone to take our market share by systematically undercutting our prices … we are ready to … battle on prices," said Nils Andersen, chief executive of Maersk's Copenhagen-based parent A.P. Moller-Maersk.

Maersk is the world's biggest ocean carrier with an estimated market share of around 15 percent, ahead of Geneva-based Mediterranean Shipping Co. and France's CMA CGM.

Andersen's warning, in an interview with Danish newspaper Dagbladet Borsen, comes just days after Maersk reported a second quarter loss of $402 million against a year-earlier profit of $198 million. First half losses climbed to $961 million. Second quarter freight rates were down 34 percent from a year ago, but Maersk forecast modest increases in the current quarter.

Maersk is reported to have cut its rates through the second quarter to protect market share despite a rate restoration program introduced on April 1.

The carrier today unveiled a series of rate increases on its intra-Americas services from Sept. 1, claiming they were necessary "to continue providing a first class service … in an environment where the operating costs remain on the rise and current rates are below sustainable levels."

The largest increases are on routes from North America to/from the West Coast South America -- $300 for a 20-foot equivalent unit and $600 for a 40-foot equivalent unit effective Oct. 1. There will be smaller rate rises of between $50 and $200 per TEU on routes between Mexico, Central America, the Caribbean and the east and west coasts of South America from Sept. 1. http://www.joc.com/node/413029

Miami, Savannah & New York Lose Asia services
Three container lines will suspend a joint service between Asia and the U.S. East Coast beginning Sept. 27, cutting back capacity on trans-Pacific lanes where liner companies have been pressing to pump up long-depressed rates.

CMA CGM, Hyundai and Maersk said they would drop the all-water loop through the Panama Canal after the last eastbound departure Sept. 27 from China. But CMA also insisted the move is only a suspension of service in response to market demand that it expects to recover.

The three lines provided eight vessels of 5,100 20-foot equivalent unit capacity to operate the loop calling ports including Ningbo, Shanghai, Qingdao, Pusan, Balboa, Savannah, New York and Miami.

“This rationalization of port coverage and slot supply corresponds to the actual trend demand observed on the Asia-U.S. market since beginning 2009. Suspension of services is in our mind a temporary move. We are fairly confident that the North America trade will rebound in the near future,” said Jean-Philippe Thénoz, CMA CGM vice president North America lines.

Rates have grown more than 50% on some trans-Pacific spot lanes as carriers have announced “rate restoration” price increases and capacity cuts. http://joc.com/node/413084

ECLAC: Hemispheric Trade and Investments to Plunge
Exports by Latin America and the Caribbean will fall 11 percent this year – the worst performance since 1937, according to a new United Nations report.

The United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) report, released Aug. 25 in Santiago, also says imports will be down 14 percent – the sharpest drop since 1982. In addition, foreign direct investment (FDI) will drop between 35 and 45% and migrant remittances will be down five to 10%.

Chilean economist Osvaldo Rosales, director of ECLAC's International Trade and Integration Division, expanded on the report, "Latin America and the Caribbean in the World Economy 2008-2009: Crisis and opportunities for regional cooperation", in an interview with IPS. Rosales is the Chilean diplomat who led the team that negotiated Chile's free trade treaties. Rosales said the World Trade Organization projects, “a mere one percent recovery for the region's exports in terms of volume.” ECLAC is slightly more optimistic with respect to exports in the region, in terms of both volume and value. He added, “We don't have ad hoc financing mechanisms to buoy up intra-regional trade. When the global crisis hit, after Lehman Brothers went under, the global economy entered a path of unexpected uncertainty, in which credit of all kind virtually collapsed, especially financing for international trade. That accentuated the drop in export and import volumes.”

He said, “I think that has created a gap into which regional and subregional cooperation mechanisms can step, by converging the credit lines of agencies like the IDB (Inter-American Development Bank), the CAF (Andean Development Corporation) and the Banco del Sur (Bank of the South).” http://www.ipsnews.net/news.asp?idnews=48229

Panama Free-trade Zone Strike Protests Tax Hike
Workers at Panama's free trade zone, from truck drivers to janitors, will stage a one-day strike next week to protest government plans to hike taxes and fees, the head of the free zone merchants association said. Giovanni Ferrari said the stoppage would affect all operations, including movement of free-zone goods through ports.

The Colon free-trade zone, spreading across 450 hectares, is a gateway to the Panama Canal and employs thousands of people responsible for moving goods to and from giant warehouses. It is also a popular tourist stop.

Lawmakers are working on legislation that would raise government fees and taxes on free zone activity by more than $100 million per year, Ferrari said. "This is a very high figure, taking into account the difficulties we are going through."

President Ricardo Martinelli took office in July on plans to boost government spending but the global recession is seen hurting tax receipts in a country that already has a narrow collecting base.

Ferrari said the free zone handled about $9 billion in merchandise in 2008 but the figure is seen falling this year. Government figures show economic activity in the commerce sector fell by 8.4 percent in the first half of 2009 from the same period in 2008, making it one of the hardest-hit areas of Panama's economy. http://www.reuters.com/article/bondsNews/idUSN2838383620090828

US Peak Season Imports to Fall Nearly 20 Percent
United States container trade imports will fall 20 percent in August and September and another 18% in October, pushing overall retail imports for 2009 down to the lowest level since 2002, industry forecaster IHS Global Insight said in a report released Thursday.

In its Port Tracker report, released with the National Retail Federation, the group said the sharp pullback in peak season shipping would leave import shipping volume measured in TEUs down 18.8% in 2009 compared to last year. The 12.3 million 20-foot-equivalents IHS Global Insight estimates that imports into major retail container ports in the United States will be the fewest since 2002, when 11.6 million TEUs came into the ports.

“The national recession has clearly been reflected in the volume of cargo U.S. retailers have imported this year,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “Numbers are down significantly, but the good news is that we’re expecting to move from double-digit declines into the single digits by the end of the year. That’s some light at the end of the tunnel that we’re really looking forward to seeing.”

Port Tracker estimates the first single-digit decline will be 3.8% in December. Throughout the rest of the year, drops have ranged from 15 percent to 32 percent.

U.S. ports surveyed handled 1.01 million TEUs in June, the most recent month for which actual numbers are available. Which was down 22% from June 2008, marking the 24th month in a row to see a year-over-year decline.

“This year’s peak season is beginning with very weak import container volume, and even though traffic is slowly building, that’s going to be the case through the remainder of the year,” IHS Global Insight Economist Paul Bingham said. http://www.joc.com/node/412990

Fresh Quest Inc. Selects Port Manatee
The Manatee County Florida Port Authority approved a five-year contract today with Fresh Quest Inc. earning nearly $1.5 million for Port Manatee and creating about 75 new jobs. The company will import cantaloupe and honeydew melons to Port Manatee from Puerto Barrios, Guatemala and Puerto Cortes, Honduras where it owns farms and packing facilities. Fresh Quest ranks among the largest U.S. importers of seasonal melons, from each November to May.

“Port Manatee is a good fit for our growth strategies,” explained Fresh Quest President Mario Cardenas. “We intend to maximize the port’s proximity to Central America and our U.S. and Canadian customer base, to minimize expenses and enhance delivery of a fresher, better product for the consumer.”

The Canadian-based company plans 22 seasonal voyages to the port each year. Exports bound for Central America will include used automobiles, farm equipment and agricultural supplies.

Liberty Terminals LLC will provide stevedoring services for Fresh Quest and Customized Brokers Inc. will handle all aspects of the import process including U.S. Customs clearance and compliance. Port Manatee currently operates more refrigerated warehouse capacity than any other U.S. Gulf of Mexico port. http://www.earthtimes.org/articles/show/fresh-quest-inc-selects-port-manatee,939735.shtml

Port of Tampa Expects Revenue Boost
Port of Tampa officials said recently they expect petroleum, container cargo shipments and total tonnage to increase in 2010, when projected total revenue will be $41.6 million, compared with an estimated $39.2 million for the fiscal year that ends Sept. 30.

The port has weathered the downturn in worldwide trade reasonably well in fiscal 2009, port director Richard Wainio said in forging the port's 2010 budget proposal that should be adopted Sept. 24. He pointed to a projected $27.2 million in net income excluding grants this year, compared with $26.2 million in 2008. The new budget continues to show increases in security costs, which at $6.9 million will account for 28 percent of the port's operating expense next year.

Cruise revenue next year is expected to remain at 2009 levels. Holland America will replace the ship Veendam with the Ryndham, port officials said, and Royal Caribbean said in May it would replace the Grandeur of the Seas with Radiance of the Seas. http://www2.tbo.com/content/2009/aug/28/sp-port-expects-revenue-boost/news-money/

Palm Beach Board Endorses Inland Port
Palm Beach County commissioners signed off recently on a proposal that could allow an "inland port" to rise on about 318 acres south of Lake Okeechobee.

The commission voted 6-1 for changes to the county's long-term growth plan that could allow the warehouse and distribution facility to be built along U.S. 27 on land owned by Florida Crystals. The location is one of a handful of sites under consideration by the Port of Palm Beach. Ultimately, port officials will decide where the project is built.

Supporters of the project say it will bring much-needed jobs to the Glades, where unemployment rates spiked to as much as 42% in June. Dozens of Glades residents at today's meeting wore T-shirts that said: "Save Our Jobs, Save Our Community."

"This is a solution to a problem that we have been facing in Palm Beach County, which is supposed to be the richest county in the state," Commissioner Priscilla Taylor said. "You have individuals in an area that are suffering." Under the plan, the warehousing and distribution center would serve as a landlocked extension of South, Southwest and Central Florida's seaside ports.

But environmental groups, including 1000 Friends of Florida, have objected to the Florida Crystals site, saying it could interfere with Everglades’s restoration. More analysis must be done, the said. The commission's approval will be sent to state planners for review. Environmentalists are expected to wage a legal battle to try to block industrial development on the site.

County planners said it would be more than a year before construction permits could be issued for the project. In addition to today's approval, Florida Crystals must also apply to change the site's zoning designation, planners said. http://www.palmbeachpost.com/localnews/content/local_news/
epaper/2009/08/25/0825inlandport.html

Port of Tampa Gets $2.2 Million Grant
The Tampa Port Authority was awarded a $2.2-million grant from the federal economic stimulus package Tuesday to begin repairs on a major petroleum product unloading berth the Department of Commerce announced recently.

The award is funded through a $150 million EDA supplemental appropriation under the American Recovery and Reinvestment Act of 2009. It is expected to result in maintaining 281 jobs, the Department of Commerce says in a written announcement.

The money will help replace a 550-foot steel bulkhead at Berth 230 in the Port of Tampa, where ships discharge much of the gasoline, fuel oil and jet fuel consumed in West and Central Florida.

The project is the first phase of a $30-million project to rebuild the berth and a pier used by barges and tankers.

The Economic Development Administration grant was announced by Commerce Secretary Gary Locke, who was briefed on the project by port director Richard Wainio during an Aug. 7 visit to the port. http://www.tampabay.com/news/business/tampa-port-awarded-22-million-federal-stimulus-grant-to-rebuild-berth/1030909

http://www2.tbo.com/content/2009/aug/26/sp-biz-bits/news-money

New, Free Global Port Directory
Port Technology International has debut Port Directory, which it calls “a comprehensive listing of over 5000 ports around the world. Go to www.port-directory.com to test the system. Port Directory details:

• Comprehensive listing of over 5000 ports around the world
• One-of-a-kind port comparison chart: listing key facilities and proximity of 10 closest ports
• Contact details and extensive port information (port facilities, regional details, handling equipment)
• Coordinates and interactive satellite maps
• Latest news, videos and featured articles from Port Technology International
• The directory is published in association with Port Technology International and PTI Online, the key resources of advanced technologies for ports and terminals.

http://www.porttechnology.org/_4951.1.port-directory-a-revolutionary-port-search-tool-launched

IMF's Lipsky Sees "Clear", Yet "Tentative" Signs Of Global Recovery
The global economy is showing "clear" but "tentative" signs of a recovery from the sharpest downturn of the post-World War II period as policymakers around the world responded with a series of unprecedented actions, one of the key officials of the International Monetary Fund said. "The signs are clear “if still tentative” of renewed growth, although opinions are divided regarding how effective specific policy actions have been, or about how soon the global economy will regain the pre-crisis level of output, or reestablish pre-crisis trend growth rates," John Lipsky, First Deputy Managing Director of IMF, wrote in the IMFdirect blog on the agency's website.

He stated that central banks across the world are unlikely to increase their borrowing costs for some more months. "With inflation threats distant, there is little doubt that central bankers intend to keep policy interest rates very low for some time to come."

The blog was posted two days after Lipsky participated in the annual conference of global central bankers, officials and leading economists in Jackson Hole, Wyoming, organized by the Federal Reserve Bank of Kansas City.

At the conference, policymakers, who included Fed Chairman Ben Bernanke, European Central Bank President Jean-Claude Trichet and Bank of Japan Governor Masaaki Shirakawa, were of the view to continue current monetary stimulus and they stand ready to act further, if needed. "Without any doubt, the mood in Jackson Hole was more upbeat than it would have been even a few months ago. Policymakers and central bankers can see that global growth prospects are reviving, and they sense that their actions are bearing fruit," Lipsky wrote.

In July, the Washington-based international lender had said the global economy is beginning to pull out of a recession, but stabilization is uneven and the recovery is expected to be sluggish. The IMF forecasts the global economic activity to expand 2.5% in 2010 after contracting 1.4% in 2009. http://www.forextv.com/Forex/News/ShowStory.jsp?seq=1048661&category=Economic+News

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