South East Shipping News

Cariform update

Grand Bahama Port Authority seeking grant opportunities for licensees Submitted by Deidre Rahming    Wednesday, 27 April 2011 10:10

 

FREEPORT, Grand Bahama -- Good news is on the horizon for locally based small and medium enterprises (SMEs). Representatives from The Grand Bahama Port Authority, Limited (GBPA) recently participated in the 4th Cariforum Regional Meeting of Business Support Organizations, held in Kingston, Jamaica, under the theme, ‘Sustainability for the Future’.  A follow-up meeting held in Port of Spain, Trinidad, also saw GBPA participation.  The second of the meetings was coordinated to assist Caribbean Private Sector Companies in ‘Doing Business with Europe’ and took as its theme, ‘How your business can benefit from the Cariforum-EU Economic Partnership Agreement (EPA)’.  GBPA representatives included Charles Pratt, Commercial Manager-GBPA and trade economist, Hank Ferguson.  GBPA-President, Ian Rolle, described the Port’s first-time attendance as a ‘bold initiative’ on the part of GBPA. “This seeks to ensure that we are leveraging our uniqueness as defined by the Hawksbill Creek Agreement to exploit opportunities of EPA to the benefit of our licensees, while exposing the advantages of doing business in Freeport to the regional Caribbean market,” Rolle said. Both meetings were designed to enlarge on the range of opportunities and services available to the private sector in the English Speaking Caribbean and the Dominican Republic, collectively known as Cariforum.  According to Mr. Pratt, the Jamaica meeting, sponsored by the Caribbean Export Development Agency (CEDA) was able to assemble all the major donors and business support organizations in the region to first identify challenges we collectively face, including access to finance and skilled labor force, cost of energy and other factors that impede small and medium sized business development. “Beyond the identification of the challenges, we were given the opportunity to gain insight into millions of Euros being made available for private sector development and how we might pursue some of these benefits for Grand Bahama in general and licensees of the Port Authority,” he added. EPA assistance for The Bahamas has traditionally been in the form of support of infrastructural development (airports, roads and bridges).  Now, as a result of the 10th EDF Regional Private Sector Development Programme implemented by CEDA in Jamaica, Euro 165 million and supplemental funds are being made available to Cariforum members to assist in building business development programmes and to assist in  taxation system reform. Mr. Pratt further revealed that GBPA representatives were able to engage in private engagements with many foreign participants and CEDA is looking forward to visiting Freeport.  “As a result of our talks, members of the Grand Bahama business community can look forward to upcoming seminars on proper procedures for grant writing applications so as to be able to access funds available for the development of SMEs.” EU Member States traditionally have their own definition of what constitutes an SME, but now the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 10 employees as "micro", those with fewer than 50 employees as "small", and those with fewer than 250 as "medium”.  Trinidad’s seminar for the Caribbean Business Community made very deliberate efforts to outline opportunities for Caribbean business expansion into Europe and potential benefits of joint venturing with EU firms.  Presenters continued with a broad overview of the main provisions of the EPA agreement, concrete benefits to be derived and potential opportunities.   Summing up both visits as highly fruitful, President-Rolle was optimistic about future prospects for Grand Bahama.  “This engagement by GBPA makes it clear that business is not being conducted as usual and every effort is being made to bring the maximum possible benefit to our stakeholders in these challenging times,” he stated. Photo 1: GBPA AT JAMAICA CONFERENCE – In an effort to seek out new opportunities for foreign direct investment into the Freeport area, Port Authority representatives participated in recent discussions in Kingston, Jamaica.  (Pictured L to R): Kirk Brown, Grants Administrator, Caribbean Export Development Agency (CEDA); Winston Rolle, President, Bahamas Chamber of Commerce and Employers Confederation; Pamela Coke-Hamilton, Executive Director-CEDA; Charles Pratt, Commercial Manager-GBPA; Tony Bradshaw, CEDA; and Hank Ferguson, local trade economist. Photo 2: SME GRANTS – Local licensees will soon learn more about opportunities for available grants for small and medium sized enterprises thanks to GBPA’s recent participation in the 4th Cariforum Regional Meeting of Business Support Organizations, held in Kingston, Jamaica. (Pictured L to R): Charles Pratt, Commercial Manager-GBPA; Kirk Brown, Grants Administrator, Caribbean Export Development Agency (CEDA); Winston Rolle, President, Bahamas Chamber of Commerce and Employers Confederation; Robert Glass, German International Cooperation Agency; and local trade economist, Hank Ferguson.

 

Containerized Cargo Upswing Continues at Port Everglades

 

Containerized Cargo Upswing Continues at Port Everglades

DATE: April 26, 2011
MEDIA CONTACTS: Ellen Kennedy or Maisy Alpert, Corporate & Community Relations,  
Port Everglades Department
PHONE: 954-468-3508 or 954-468-3505
EMAIL: ekennedy@broward.org or malpert@broward.org

A positive sign that international trade to South Florida continues to improve, Port Everglades officials are reporting that containerized cargo for the first six months of the fiscal year ended March 31, 2011 is up 12.9 percent over the same period last year.

Container throughput in TEUs, or "20-foot equivalent units" which is the cargo industry's standard container measurement, totaled 448,520 TEUs for the six months ended March 31, 2011, up from 397,228 TEUs the previous year. While lower than the number of TEUs three years ago (FY 2008) when Port Everglades reached an all-time high in container traffic, this recent increase is a positive trend that has been growing since last summer.

"This is a significant increase over where we were last year and we are cautiously optimistic that this is another indication that international trade is rebounding," says Port Everglades Director Phil Allen. "Cargo operations at Port Everglades account for more than 5,300 direct jobs locally and supports nearly 132,000 jobs throughout Florida, so we are pleased with the growth in this business sector, and nearly all container cargo lines that call on the Port have contributed to this growth."

Port Everglades is moving forward with several capital improvements to foster growth in containerized cargo volumes at the Port. The Port is nearing completion of a 41-acre containerized cargo terminal of which more than half will be used as a new handling facility for SeaFreight Agencies (USA) Inc. The Port also purchased a new mobile harbor crane that has the capability to load containers and handle heavy lifts up to 100-tons. The Port is also moving ahead with Master Plan projects that include lengthening the Port's Turning Notch by 1,500 feet to allow for four additional berths, and is nearing completion of a U.S. Army Corps of Engineers Feasibility Study to deepen the channel to 50 feet. With the recent contract awarded by the Florida Department of Transportation for construction of the Eller Drive Overpass project, the Port continues planning for rail connecting to a near-dock Intermodal Container Transfer Facility in the Southport area.

Allen also notes that Port Everglades' 20-Year Master/Vision Plan aligns with the findings of the Florida Chamber Foundation's Florida Trade and Logistics Study. The recently released study found that Florida stands to benefit from the Panama Canal expansion and growth in Latin America and the Caribbean, which ultimately creates the potential to increase job creation and position the state to become a global trade and logistics hub through the development of its 14 deepwater seaports.

Port Everglades is one of the nation's leading container ports and a trade gateway to Latin America and Caribbean. Port Everglades has direct access to the interstate highway system, is within two miles of the Florida East Coast Railway hub and is just one mile from the Atlantic Shipping Lanes. Ongoing capital improvements and expansion ensure that Port Everglades will have the ability to handle future growth in container traffic. A world-class cargo handling facility, Port Everglades serves as an ideal point of entry for products shipped around the world. 

 

Basso defects from top TSA slot

TSA’s Don Basso Named Vice President of Mercury Aviation Services

Basso’s passenger and cargo experience matched with military service is a strong combination

 

Los Angeles, CA (April 26, 2011): Mercury Aviation Services, Inc. (MAS) announced today that Donald M. Basso has joined the company as Vice President with responsibility for operations and sales. MAS is the consulting arm of Mercury Air Group, Inc., a global leader in the aviation services industry with business operations in more than 60 locations worldwide.

MAS provides aviation security expertise and operational consulting to airlines, shippers, forwarders, as well as foreign and domestic airports. Additionally, MAS is the first Transportation Security Administration (TSA) certified on-airport Independent Cargo Screening Facility operator in the United States and provides cargo screening services to the aviation industry.

Most recently, Basso was working on TSA’s plans for 100% screening of cargo in-bound to the U.S. Basso also served as a Principal Cargo Security Analyst with the TSA Air Cargo Group where he was responsible for developing and deploying the Certified Cargo Screening Program (CCSP).

Previously, Basso was an Aviation Security Inspector responsible for regulatory inspections and TSA’s covert checkpoint testing initiative at Category X Airports. While working at JFK in 2002, Basso reported directly to the Federal Security Director and was critical in executing the Strategic Airport Security Rollout.

“We are extremely pleased to have recruited someone of Don’s level of expertise and experience. He will significantly enhance MAS and the services we are able to offer,” said David A. Herbst, President of Mercury Aviation Services, Inc.

Basso brings an impressive background to MAS, including subject matter expertise in airport security, and cargo, passenger and checked baggage screening as well as service in the Military Police Corps with tours in Iraq, Afghanistan and other countries in Africa and Europe. As a member of the New York Army National Guard, Basso was deployed to the World Trade Center immediately following 9/11 for rescue, recovery and security operations.

In 2003, he developed and trained participants for the first Iraqi National Police Academies in several provinces within Iraq and then later taught SWAT techniques to Iraq Special Forces Anti-Terrorism units. Additionally, he was the first Supervisory Transportation Security Officer at JFK Airport following 9/11.

“Mercury’s reputation is unmatched within the aviation industry and very well respected within TSA,” said Basso, adding, “making this move makes sense for me in putting my knowledge to work and helping airlines, airports and others in the supply chain maximize their understanding and compliance with the regulatory and security challenges that will continue to become more restrictive.”

 

Where the big cargo money is: Iron ore on huge ships from Brazil to China

Vale Brasil Sends Shipping Returns Plummeting: Freight Markets

 

April 27, 2011, 7:32 PM EDT

 

 

By Alaric Nightingale

April 28 (Bloomberg) -- The biggest iron-ore carrier ever built arrives in Brazil next week, a sign of strengthening demand for commodities that means record profit for Vale SA and a slump in earnings for shipping companies.

 

The Vale Brasil, almost as big as the Bank of America Tower in New York, is scheduled to be at Rio de Janeiro on May 3, tracking data compiled by Bloomberg show. It is the first of a fleet of 19 such vessels that Vale, the world’s largest iron-ore producer, is building to supply China, which buys about 60 percent of all shipments of the raw material used to make steel.

 

For Rio de Janeiro-based Vale, the new ships ensure it can export more ore at a time when shortages drove prices 84 percent higher in a year. For ship owners, it worsens a glut that caused returns to drop 66 percent since January. A measure of the combined earnings of the 12-member Bloomberg Dry Ships index will fall 23 percent this year, with Genco Shipping & Trading Ltd. reporting a 75 percent decline in profit, according to analysts’ estimates compiled by Bloomberg.

 

“These sea monsters are going to prolong the slump,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo whose recommendations on shares of shipping companies returned 27 percent in six months. “It’s going to change the way iron ore flows to China, and it will take longer until the market rebalances,” he said, predicting some rates in the spot, or single-voyage, market may not be profitable until 2015.

 

Busiest Route

 

Vale’s Chinamaxes, named for the customer they are being built to serve, will displace ships competing for the industry’s single-biggest cargo on its busiest route. The ore is currently hauled mostly by capesizes, which use shipping lanes around South Africa’s Cape of Good Hope and Chile’s Cape Horn.

 

Returns for owners of capesizes, which have less than half the carrying capacity of a Chinamax, are at $6,755 a day, according to the Baltic Exchange in London, which publishes daily rates for more than 50 maritime routes. The assessment is for contracts in the spot market. Ship owners also lease their vessels on long-term contracts at fixed rates.

 

Owners of capesizes valued at $60 million need $25,000 a day to cover expenses such as crew and financing, according to HSBC Shipping Services Ltd. Variable financing costs mean companies have different break-even rates, and while the cost of a new capesize averaged $59 million over the last decade, it reached $97 million in 2007, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.

 

Forward-freight agreements, traded by brokers and used to bet on or hedge future transportation costs, anticipate rates no higher than $20,268 a day through 2016, Baltic Exchange data show. Rates are volatile, rising or falling 17 percent or more in each of the last 12 quarters.

 

Global Recession

 

Vale ordered its Chinamax fleet from Cayman Islands-based China Rongsheng Heavy Industries Group and Seoul-based Daewoo Shipbuilding & Marine Engineering Co., Clarkson data show.

 

The mining company wants to better manage its costs after capesize rates averaged $116,054 a day in 2007, up from $11,928 in 2002. Returns slumped from a peak of $233,988 in June 2008 as the worst global recession since World War II cut the number of cargoes and a growing glut of ships were produced at yards in China, Japan, South Korea and the Philippines.

 

There are 1,085 capesizes in service, with an order book equal to 40 percent of the capacity of the fleet, according to Redhill, England-based IHS Fairplay, which compiles data on ships and ports. The average capesize can carry about 170,000 tons of cargo, compared with 400,000 tons for a Chinamax.

 

Vale’s fleet will have a combined capacity of 11.4 million deadweight tons when complete, according to Clarkson data. That compares with 217.1 million deadweight tons for the capesize fleet. China imported about 10.9 million metric tons of iron ore a month from Brazil last year, customs data show.

 

‘Doesn’t Make Sense’

 

“They wanted to take freight into their own hands, but freight costs are incredibly low right now,” said Jeffrey Landsberg, president of Commodore Research in New York. “They made the decision when capes were earning over $100,000 a day or $200,000 a day, but when you have capes at $6,000 a day, it doesn’t make sense for a miner to be an owner too.”

 

Vale’s strategy may save money over the two decades or more the vessels will operate. Costs on the route to Qingdao in China from Tubarao in Brazil have risen or fallen at least 29 percent every year in the last decade, Baltic Exchange data show.

 

Global trade in iron ore will advance 7 percent to 1.06 billion tons this year, from 450 million tons in 2001, London- based Clarkson estimates. About 90 percent of global trade moves by sea, according to the Round Table of International Shipping Associations.

 

Steelmaking Nation

 

While China, the world’s biggest steelmaking nation, sought to curb inflation through four interest-rate increases since October, its economy will still expand 9.5 percent this year, according to the median of eight economists’ estimates compiled by Bloomberg. The U.S. will grow 2.9 percent and the euro region 1.7 percent, the estimates show.

 

Iron-ore prices will average a record $164 a ton this year, up from $115 in 2007, Sydney-based Macquarie Group Ltd. said in a report in January. Global steel demand will expand to 1.44 billion tons in 2012, from 1.28 billion tons in 2010, with 38 percent of the increase coming from China, the Brussels-based World Steel Association estimates.

 

China accounted for 43 percent of Vale’s iron-ore exports by volume last year, and the company has said it will spend $720 million on shipping this year to serve Asian clients. Vale will report adjusted net income of $25.1 billion this year, compared with $17.1 billion in 2010, according to the mean of nine analysts’ estimates compiled by Bloomberg.

 

Estimated Earnings

 

While shares of the company fell 4.6 percent in Brazilian trading this year, every single one of the 19 analysts tracking Vale rate it a “buy.” It is trading at about 7.8 times estimated earnings, compared with a peak of 22 times in November 2009, data compiled by Bloomberg show.

 

That contrasts with this year’s 10 percent drop in the Bloomberg Dry Ships Index, now trading at 11 times forecast earnings. A measure of combined earnings per share across the index will drop 23 percent this year, according to data compiled by Bloomberg using analysts’ forecasts.

 

Nine of the 12 members of the index will report lower profit or losses this year, the data show. Genco, based in New York, will earn 81.2 cents a share this year, down from $4.07 last year, the mean of 11 analysts’ estimates shows. The shares fell 41 percent since the start of January. Capesizes account for about 40 percent of its fleet capacity, company data show.

 

Index-Linked Rates

 

Genco operates mostly in the time-charter rather than spot market and has a combination of fixed and index-linked rates in those agreements, Chief Financial Officer John C. Wobensmith told a conference in New York on March 22. Six of its nine capesize time charters expire this year, and the remainder in 2012, company data published that day show.

 

Delays in the delivery of new vessels and accelerated scrapping means the fleet may not expand as quickly as expected, Wobensmith told the conference.

 

Even the rebound to $20,000 a day in returns anticipated by forward-freight agreements would still mean a return on capital of no more than 4 percent for a capesize costing $55 million, according to Andreas Vergottis, the Hong Kong-based research director at Tufton Oceanic Ltd., which manages the world’s biggest shipping hedge fund.

 

“The first of these ships loading in Brazil is a seminal moment,” said Nigel Prentis, head of research at HSBC Shipping Services in London. “We’ve seen a reduction in the amount of spot cargoes coming out of Brazil. The market should be fairly nervous about the introduction of these ships.”

 

--With assistance from Juan Pablo Spinetto in Rio de Janeiro. Editors: Stuart Wallace, Steve Stroth

 

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

 

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

 

Largest seafood plant in Caribbean opening in Kingston

And looking to export to North America!

 BY JULIAN RICHARDSON Assistant business co-ordinator richardsonj@jamaicaobserver.com

Wednesday, April 27, 2011

 FROM its near-finished US$8 million ($688 million) processing plant on Slipe Road in Kingston, Rainforest Seafoods is set to make a foray into the lucrative regional market for value-added seafood.

Rainforest chief executive officer Brian Jardim told the Business Observer last week that it represents the company's biggest investment in its 16 years of operation.

"It's going to be the largest-value added seafood plant in the Caribbean -- the first of its kind in our region," Jardim told this newspaper during a press tour of his company's headquarters in Montego Bay and the state-of-the-art processing facility being constructed on 3.5 acres of land at 67 Slipe Road in the nation's capital.

It is from its base in Montego Bay that Rainforest has established itself as one of the premier regional distributors of seafood sourced from all across the globe. The Slipe Road plant, Jardim said, represents the next step for the company towards its goal to become as vertically integrated as possible.

"We are creating as many new markets as we can... focusing on product niches that haven't been explored before," explained Jardim.

The Slipe Road facility will have the ability to store six million pounds of products - more than doubling the storage capacity of the plant in Montego Bay -- and its operations will include cooking and breading, smoking, filleting, producing ready-to-eat meals and modified atmosphere packaging. Among the value-added products that will be produced at the facility are a heat and serve conch soup and a jerk shrimp that is being developed with the help of the Scientific Research Council.

"That product," Jardim said of the jerk shrimp, "we have big plans for... we are looking at potentially getting it into the North American and European markets."

Rainforest is particularly eyeing the Slipe Road facility as the platform from which it will take aim at the quick service restaurant (QSR) market, one of the biggest consumers of seafood products.

"We don't currently serve many of the fast food restaurants in Jamaica and that's a big chunk of business -- fish fingers, breaded fish fillets, popcorn shrimp etc -- all tailored to each QSR's preferred flavour profile in each island." noted Jardim.

"That represents for us, in Jamaica and the Caribbean, a huge new niche that we are targeting," he added.

The Slipe Road initiative will also see the firm engaging local aquaculture producers to include them along in its supply chain. For instance, tilapia is a popular fish offering of QSRs and it is against this background that Rainforest plans on working with local tilapia growers.

"We have been working closely with the Minister of Agriculture and Fisheries and his team, headed by Dr Marc Panton, on this initiatve and are very impressed with their focus and commitment to making this project a reality for all stakeholders. We are looking to pull in a lot of local artisenal fishermen and fish and shrimp farmers as we ramp up this facility," declared Jardim.

Furthermore, the Slipe Road plant is expected to add another 100 persons to the Rainforest workforce.

However, Jardim noted that all of these positive spin-offs would not have been possible if the company did not get support from the Government under its Modernisation of Industry programme, which offers waivers of duties on capital equipment and is made available on a rigorous pre-qualification basis.

"In fairness, it's a project that we wouldn't have hung our hat on if we didn't have that sort of support," admitted the Rainforest boss. "We simply couldn't have afforded to make it happen, due to the scope and size of the required capital investment."

He said Rainforest received a total of a half-a-million US dollars worth of duty and GCT waivers on the US$8 million project, which was funded by First Global and PanCaribbean banks.

"The whole modernisation programme was very important to making this investment happen and approximately half of our project's total capital expenditure qualified for tariff exemptions,"said Jardim. The exempt equipment includes cookers, breaders, formers, IQF spiral freezers, tumble scalers and graders among other specialised seafood processing machinery.

"It is not something that you get randomly or politically... you have to qualify as a business that is expanding significantly and you have to prove your case clearly," he said, directly addressing persons who have criticised the Government for providing Rainforest and other local businesses with the waivers.

Indeed, Rainforest's big expansion plan is a remarkable achievement for a company that started in 1995 without any assets and a US$100,000 line of credit borrowed from the then Manufacturers' Merchant Bank. The line was used to finance the company's first container load of seafood, Jardim told the Business Observer.

"For a while we brokered products directly to hotels and distributors; we were sourcing it from Guyana and Suriname at the time." he revealed. "For the first two or three years we did straight brokering without a shop front or distribution system," he said.

Rainforest flourished in those years by bringing affordability and variety to what was at the time an under-serviced and growing market for seafood, Rainforest general manager Ernest Grant explained.

"I think Jamaicans generally had seen the necessity to eat healthy and there had been a void in the marketplace for affordable seafood and Rainforest sought to add affordability and variety of seafood offerings, especially for the hoteliers and the consumers who started recognising its wholesome benefits," said Grant.

By 1998, the company bought its first truck and leased a property in Montego Bay, just across the road from the Freeport facility it now operates from in that city.

"We just grew organically as we went along," noted Jardim.

"In the early days, we shipped from plants at source and sold to islands such as Antigua, Barbados and St Lucia in container loads -- we worked along with the plants that we had developed relationships with," Jardim continued. "Then for several years after that we just focused inwards on developing the local Jamaican market...we started exporting our Rainforest branded products to the Caribbean about five years ago."

The long and short of it is that Rainforest now has 15 outlets across the island servicing thousands of customers daily, as well as processing operations and fishing vessels in Belize and Honduras. Additionally, the company now has a fleet of 30 freezer trucks and will have over 350 employees when its Slipe Road facility opens later this year.

What's more is that Rainforest has expanded to sourcing from all over the world and now exports to ten islands within the Caribbean region. Its portfolio of 500-plus stock units includes mussels from New Zealand; salmon from Chile; squid from China; saltfish from Norway; mackerel from Spain; herring from Canada, among many other products from all over the world.

"We are suppliers of whatever the Jamaican and Caribbean seafood pallet demands," Grant interjected.

A major part of the company's success has been its ability to remain efficient, Jardim said, investing in energy measures that save the company tens of millions of dollars annually.

"We are trying to do a few things right because our carbon footprint is quite large in terms of energy consumption," the Rainforest head revealed.

The cost-saving measures include converting all of the company's lighting in its freezers to LED, energy delay timers on its dozens of motors and compressors and producing hundreds of gallons of bio-diesel per week from used cooking oil.

Addressing the latter, Jardim said: "We collect used oil from hotels and restaurants islandwide and it's a process where you add methane and basically produce a diesel equivalent in our small bio-diesel plant. Our fleet of freezer trucks and containers that circle the island daily are currently fuelled by 10 to 15 per cent bio-diesel."

The company has also invested in the construction of a well on the new Slipe Road premises which will provide thousands of gallons of water daily.

"Our processing is very water intensive and a lot of ice making is required in fresh seafood production... the well will help to conserve on this vital function" said Jardim.

But, when it's all said and done, it is Jardim's confidence in Jamaica that has been the catalyst of all the success that Rainforest has enjoyed since it was established. And right now he is bullish on Jamaica.

"Honestly, doing business in Jamaica has gotten a lot better over the last several years," said Jardim, "The infrastructure that we have here in our Montego Bay HQ -- the new and improved road network from Port Antonio to Negril, excellent airlift and seaport access -- is a significant fillip for us. Our dollar is stable and interest rates have been trending down -- there is no better time to roll the dice with an aggressive expansion like this." The upshot is that, in Rainforest's Slipe Road operations, he is pumping hundreds of millions of dollars into a semi-depressed community in Kingston.

"We feel that we will be doing our part in the neighbourhood in bringing a quality facility there and providing stable employment opportunities as well," Jardim said, in a tone of a man who is confident that he made the right move.

 

 

Read more: http://www.jamaicaobserver.com/business/VIDEO--Largest-seafood-plant-in-Caribbean-opening-in-Kingston_7739536#ixzz1KjgKbO1X

 

Savannah River will never be WIDE enough for two way ship traffic

More reasons Savannah can’t ever compete with deeper Miami port:

The channel would be so narrow it would only permit one way traffic

 

BY BILL DAVIS

 John Cameron, a retired captain in the U.S. Coast Guard and the executive director of the Charleston Branch Pilots Association, said channel expansion in Savannah would have limited returns because the narrow waterway precludes two-way shipping traffic, which Charleston’s harbor enjoys.

 Continued population and economic growth in the Southeast has created a regional call for port expansion that is echoing across the border between South Carolina and Georgia — especially along the Savannah River, a shared border between the two states.

 More people with more money will mean more demand for shipped goods. To quote Roy Scheider’s famous line from the movie Jaws: “We’re gonna need a bigger boat.”

 

And those bigger boats will be able to sail through the Panama Canal beginning in the fall of 2014, the 100-year anniversary of the opening of the canal. Post-Panamax container ships, as they are called, have already been built and dwarf even aircraft carriers.

 

According to the South Carolina State Ports Authority, millions of container units of goods bound for our region are currently unloaded along the West Coast and then sent here along trucking routes and train lines. With the looming expansion of the Panama Canal, those goods now should be able to be unloaded on the East Coast. The problem? Some ports will have to widen existing channels and deepen rivers to accommodate the new massive mega-carriers.

 

Currently, Georgia is in the process of expanding its Savannah River port in Garden City in such a way that has many in the South Carolina Legislature, not to mention the maritime industry, concerned.

 

The Savannah River widening and deepening project could, according to South Carolina Sen. Larry Grooms (R-Bonneau), chairman of the Senate Transportation Committee, scuttle a joint South Carolina-Georgia project to construct a mega-port in Jasper County. The Jasper port would be 12 miles from an Atlantic sea buoy — 10 miles closer than the Garden City facility.

 

Grooms said the Garden City project would essentially “wear out” the Savannah River environmentally because two ports would share the same river.

 

How? He said any widening and deepening of the existing channel in the river all the way to Garden City would introduce more and more saltwater to the waterway that would lower oxygen levels to the point that federal guidelines would prohibit the construction of Jasper.

 

“To hear Georgia, it’s Garden City and Jasper,” said Grooms. “But the way I see it, it’s Jasper or nothing.”

 

Georgia Ports Authority executive director Curtis Foltz walked into the lion’s den last week, having agreed to speak at a Charleston maritime association dinner. Before he left his Savannah office, Foltz, who worked at the Charleston port facility for several years in the 1990s, preached that a common tide would float all boats. Foltz’s reading of the region’s growing demographics tells him that an expanded Savannah facility, a Charleston facility and a Jasper facility are all needed to meet the region’s growing demands over the next 20 years.

 

John Cameron, a retired captain in the U.S. Coast Guard and the executive director of the Charleston Branch Pilots Association, has plotted a third course. He has produced a report on South Carolina’s interest in the Savannah widening effort and presented those findings to Grooms’ committee.

 

Cameron, whose organization’s members pilot foreign and U.S. ships bound for foreign waters while in Charleston harbor, said he understands how the expansion of the current channel along the Savannah River would benefit Georgia. But he, too, worried that more seawater would kill not only some of the environment there, but also future plans for Jasper. He also said channel expansion in Savannah would have limited returns because the narrow waterway precludes two-way shipping traffic, which Charleston’s harbor enjoys.

 

Cameron has instead championed a limited deepening and widening leading up to the current Garden City facility that wouldn’t threaten the future of either Jasper or Charleston.

 

Cameron is also worried that expansion now might also exhaust political will for the Jasper project, especially since the federal government would have to spend nearly $600 million to dredge for Garden City versus half of that to deepen the Charleston harbor.

 

Crystal ball: The ships are going to come and the region will have to figure out the best way to welcome them, unload them, fill them back up and send them back out on their way. The question is whether Georgia will expand at Garden City in such a short-term way that it actually hampers future port expansions? Or will Georgia and South Carolina create a plan that would navigate smooth sailing for all involved? 

 

Bill Davis is editor of Statehouse Report. He can be reached at billdavis@statehousereport.com. Let us know what you think: Email news@free-times.com or comment below.

 

Peru To Host 2011 Congress Of Latin American Ports

Peru's national ports group, ENAPU S.A., in partnership with the American Association of Port Authorities (AAPA) and the Peruvian government, will sponsor the international seaport association's XX Congress of Latin American Ports in Lima, June 22-24.  The title of this year's ports congress is Challenges for Latin American Ports: Competitiveness and Efficiency to Adjust to the New International Economic Scenario.

Peru's Minister of Transportation and Communications, Enrique Cornejo, and his counterpart in the Port Secretariat of the Office of the President of Brazil, José Leonidas de Menezes Cristino, will open the event with their respective keynote addresses.  Each will describe his country's policies regarding investment in port infrastructure and development, a subject that is of great interest to the port industry, including businesses that provide goods and services to the industry.  

"Improving freight mobility and enabling a nation's seaports to be more efficient, productive and secure are the best investments a country can make to strengthen its economy," said Kurt Nagle, AAPA's president and CEO.  "The goal of this conference is to provide Latin American seaport industry officials and their hemispheric port partners a forum to exchange ideas, share lessons learned and benefit from the collective knowledge of the industry."

The meeting of port executives from throughout the Western Hemisphere will address a host of compelling industry topics, such as: The World Economy and the Proposal for the Development of Latin American Ports; Sustainability of Latin American and Caribbean Ports; Strategies of Global Port Operators and of Shipping Lines; Port Security; Positioning and Consolidation of the COAS HUB; and a panel discussion on the subject of financing sources for ports.

The business program will be supplemented with other activities, including presentations by port service providers.  These activities are being organized to promote interaction, sharing of best practices and strengthening the integration of port logistics at the global level.

Interest is running high over the participation of the many prominent speakers and guests, among them (in alphabetical order):

• Larry Boorstein, Project Manager, Principal Economist Planner, AECOM, USA
• Robert Bosman, General Manager Terminal - Investments & Projects Central & South America - APM Terminals, USA
• J. Katherine Downs, Principal Investment Officer, International Finance Corporation (IFC), World Bank Group (among others), USA
• Tom Degrieck, Project Manager Jan De Nul Group, Belgium
• José Luis Estrada, Director (and expert in port planning and management), Estrada Port Consulting, Barcelona, Spain
• Paul Kent, Vice-President, Infrastructure Planning and Port Specialist, Nathan Associates Inc., USA
• Juan Kuryla, Deputy Director, Port of Miami, USA
• Jorge Madorrell Blasco,  Director, Ports Practice for Euromed & South America, BNP Paribas, France,
• Johan Ohlsson,  Manager, Center for Maritime and Logistics Competition, Securitas Group, Sweden
• José Luis Qwistgaard, Director General, Aquatic Transport, Ministry of Transportation and Communications of Peru
• Othón Pérez, Director General, Bureau of Port Development and Administration, General Coordination of Ports and Merchant Marine, Mexico
• Franc Pigna, Director, AEGIR Port Property Advisors, USA
• John Price,  Director General of Business Intelligence, Kroll (risk consultants), USA
• Rodolfo Sabonge, Vice President, Office of Market Research and Analysis, Panama Canal Authority; Panamá
• Ricardo Sánchez, Head, Infrastructure Services Unit, Economic Commission for Latin America and the Caribbean (ECLAC), Chile
• Jorge Ernesto Sánchez Ruíz, General Coordinator of Performance Evaluation, Portos do Brasil, Brazil
• Gonzalo Santillana, General Manager, MSC, Perú
• Carlos Urriola, Senior Vice President, Carrix, Inc., Panamá
• Carlos Velez,  Regional Director for Latin America, American President Lines (APL), USA
• Julián Villalba, Coordinator, Port Programs, Andean Development Corporation (CAF), Venezuela
• Robert West, Director for Ports, Coastal and Maritime Infrastructure and Environment, Latin America and the Caribbean, Worley Parsons Group, USA
• Mike Zampa, Vice President for Corporate affairs, Neptune Orient Lines (NOL),  Singapore

Visit http://www.congresopuertosperu2011.com/ for detailed information in Spanish, English and Portuguese about the XX Congress of Latin American Ports program, which will take place at Lima's JW Marriott Hotel, in the District of Miraflores, with a spectacular view of the Pacific Ocean.  The web site includes information on pre- and post-event tours.

For additional information, please contact:

Lic. Zulma Dinelli
International Promotion
XX AAPA Latin American Ports Congress
Perú - 2011
Tel: 54-341-5301745
Cell: 54-9341-6405282
zulmadinelli@contactocentro.com 
or
zulmadinelli@hotmail.com 

 

Hapless communists fret over Cuba's lack of rain, grain, brain, and fear of hurricanes

Cuba adjusts plans amid price hikes, weather fears

 

Tue Apr 26, 2011 12:00pm EDT

* Government adjusting 2011 economic plans

 * Imports to cost $800 million more than expected

 * Business partners and residents fret

By Marc Frank

 

HAVANA, April 26 (Reuters) - Rising food and fuel prices and fears that an active hurricane season looms have Cuba tightening its belt, according to government leaders and local economists.

 "Just a few months into 2011 and according to the most recent data, imports this year will cost an additional $800 million for the same amount of goods we planned to purchase, forcing us to adjust the plan approved in December," President Raul Castro told a Communist Party Congress last week.

 The country imports between 60 percent and 70 percent of the food it consumes and 50 percent of its fuel.

 High fuel prices also increase prices of most other products the island purchases abroad, and the cost of transporting them.

 Rainfall has been less than 10 percent of the average over much of the country this year, which could force more food imports.

 Hurricanes on average hit the Caribbean island every other year, but the last major storm was in 2008, so the country is fearing the worst this season.

 All this has creditors and foreign business partners raising their eyebrows as they remember 2008, when high international food and fuel prices, hurricanes and the international financial meltdown left debts and dividends unpaid and their local bank accounts frozen.

 The government was forced to slash imports 37 percent in 2009 and kept them at a similar level last year, which eased the 2008 financial crisis, but slowed growth to less than 2 percent.

 Local economists said Castro had improved management of the state-dominated economy and built up reserves since 2008, making the prospects of a liquidity crisis less likely.

 According to the Bank for International Settlements, Cuba had $5.3 billion in deposits at international banks at the close of 2010, compared with $2.6 billion at the end of 2008.

 Credit was tight, with outstanding bank loans to the country at $1.7 billion, down $200 million over the same period.

VENEZUELA LENDS A HAND

 The economists said the amount socialist ally Venezuela pays for some 40,000 healthcare and other professionals working in the South American country is pegged to oil prices, which helps offset rising prices.

 Oil-rich Venezuela is Cuba's only petroleum supplier.

But there are no such deals for food.

 Igor Montero, president of Alimport, the state-run food import monopoly, told local media earlier in the month that imports of bulk foods such as wheat, corn, soy, powdered milk and cooking oil would cost the country 25 percent more than planned this year, or $308 million.

 "Our price for a pound of chicken has gone from $0.33 in February to $0.51 for delivery in June, up 52 percent," said a U.S. businessman who sells poultry to the country under an amendment to the trade embargo that allows agricultural sales for cash. He spoke on condition of anonymity.

 In the end, this means Cubans, who have already seen gas and food prices go up this year, must brace for more.

"This will increase external financial tensions and it will be necessary to apply new adjustments, which in the end, will impact negatively the population," said a Cuban economist, asking that his name not be used.

 

Truck firms face cascade of calamities

Freight Rates Are Soaring

   

April 25, 2011

March 2011 load-to-truck ratios, by U.S. state. The map depicts an abundance of outbound freight loads 
(red) and relative lack of capacity (yellow) originating in each state on the TransCore DAT Network 
of load boards in the month of March. Load volume continued to set records, 
and capacity remained tight in most markets, leading to a load-to-truck ratio 
of 10 loads per available truck nationwide.

By Tim Higham

A perfect storm of issues are affecting available truck capacity, causing freight rates to soar and growers to scramble for capacity. Interstate Transport’s Tim Higham explores the challenges many growers are facing.

For those growers reaching into the common carrier pool this year, in order to move material to customers they are finding trucks impossible to find – at any price in some regions. A perfect storm of issues are just beginning to show their effect on available truck capacity, causing freight rates to soar and growers to scramble for capacity.

This week, I have been inundated with calls from growers nationwide looking for help. One grower, who did not want to be named, stated: “I have loads sitting on the dock for days while we look for trucks. I am at the point where I will pay anything to service the customer or I will lose them. The problem is that whatever I offer to pay, it does not seem to be high enough. There is always someone more desperate willing to pay more.”

In an April 6 online seminar, an FTR Associates economist stated that truckload capacity shortages will gather further momentum this year and continue through 2013 as the economy recovers and as new regulatory restrictions will limit the driver pool. FTR senior consultant Noel Perry estimates that because of the economic upturn and the federal government's push for improved safety, "a couple hundred thousand more drivers will be taken out of the marketplace between now and the end of next year."

The problem in the horticultural market is magnified due to a host of factors that are changing the truck market in a permanent manner. In addition to the usual challenges such as the spike in spring shipping needs, the new CSA regulations are pushing carriers out of the market. It just happens that the carriers being pushed out are often small fleets with less than 10 trucks – the very carriers willing to take spot-rated, multi-stop plant loads.

In addition, fuel prices are causing small fleet operators to take huge losses unless they can find a way to be more efficient by reducing deadhead miles. Shippers often think the fuel surcharge they pay covers the additional cost of diesel, but the carrier is not compensated for the deadhead miles they drive between loads. They have to pay for that fuel out of their own pocket. I have spoken to well over a dozen small fleet owners that closed the door this year who stated that high diesel prices pushed them over the edge. Many of them were running older, non-aerodynamic equipment that’s getting less than 5 mpg, and the rising cost of diesel made continuing to run their trucks a poor decision.

But the problem isn’t just high costs and increased regulation. For the first time anyone can remember, banks will not loan money on equipment to truckers. Even those carriers that are holding their own are being given loan or lease terms that are unworkable. One Florida based trucker told me, “My trucks all came to the end of their five-year lease this year and I was told they would be happy to give me new equipment, but I had to pay six months of payments upfront. That came to almost $200,000 on eight temperature-controlled rigs. I was told they are being much more picky in their underwriting and credit department. Five years ago, I put nothing down but the first month in advance. The only choice I had was to turn in the keys.”

Perry, the FTR Associates economist, says: "We expect the rest of the year to have relatively strong truck shortages and to include further price increases." Perry predicts prices will continue to rise through next year and into 2013 even if trucking capacity catches up with demand. He adds that truck tonnage will average 5 percent growth this year through 2013.

With a declining carrier base to move the available freight, that will further exacerbate shortages. Preliminary FTR data shows March Class 8 truck net orders totaled 28,871, a 20 percent increase over February preliminary orders and a 155-percent increase over the same period in 2010. The data shows that the current strong new truck orders are primarily from large, financially stable carriers, and are replacing aging equipment, not adding to net capacity.

About the author:

About the author: Tim Higham is the CEO and president of Interstate Transport, one of the largest dedicated logistics providers to the horticultural market. You can e-mail Higham at thigham@InterstateLG.com. Learn more atwww.InterstateLG.com

 

Huge China investments in Caribbean mean opportunities for Miami River

Why is China spending billions in the Caribbean?

By Ezra Fieser

 

SANTO DOMINGO, Dominican Republic — After the tiny Caribbean island of Grenada severed diplomatic ties with Taiwan in 2005, it received a token of appreciation from the mainland Chinese government: a $55 million cricket stadium.

It was part of $132 million China doled out to Caribbean countries in aid and soft loans in the years leading up to the 2007 Cricket World Cup. At the time, the investment was seen as a not-so-subtle reward to countries that had broken off formal relations with Taipei in favor of Beijing.

Ever since, China has made that sum look like pittance.

 The Beijing government and private Chinese corporations are spending billions in the Caribbean, building major tourism projects, financing roads and ports and buying companies — all of which are helping open new markets for Chinese products. The onslaught has cash-strapped Caribbean governments simultaneously praising China as a welcome benefactor and questioning what the country wants in exchange.

“Nearly every island in the Caribbean, from the smallest on up, currently has a substantial investment from China,” said David Jessop, managing director of the Caribbean Council, a London-based consultancy that works with Caribbean governments. “It seems that what nobody knows is what is motivating China.”

The total investment is difficult to quantify. China’s Ministry of Commerce reported that foreign direct investment in Caribbean countries by Chinese firms totaled nearly $7 billion in 2009, a more than 300 percent increase from the 2004 foreign direct investment of $1.7 billion. Those figures are somewhat misleading because of Chinese use of Caribbean tax havens — such as the Cayman Islands, which received $5.3 billion in Chinese foreign direct investment in 2009.

That aside, Caribbean islands have clearly been the recipients of investment by both Chinese firms and the government of the People’s Republic of China, which is financing some of the Caribbean's most notable, and largest, projects.

The boldest broke ground last month: The Chinese government's Export-Import Bank is putting $2.4 billion toward the construction of a 3,800-room resort in the Bahamas that will boast the largest casino in the Caribbean. Roughly 5,000 Chinese workers will be brought in to construct the Baha Mar resort on Cable Beach.

Others projects recently agreed to or completed by Chinese firms or the government include:

A 2011 commitment by Beijing to build a $600 million deep-sea harbor, highway and port in Suriname that will link the country to its natural resource rich southern neighbor, Brazil.

A $462 million cash infusion in a stalled beachfront resort, known as Punta Perla, on the Dominican Republic's east coast. Dominican Minister of Tourism Francisco Javier García Fernandez said he hoped the agreement would bring more investment from China to the Caribbean’s most visited country.

The construction and operation of a $1 billion container port in Freeport, the Bahamas, just 60 miles from Florida, by Hong Kong-based conglomerate Hutchison Whampoa Ltd.

A $17 million cricket stadium and $122 million in economic assistance from the Chinese government to Dominica, a country of less than 73,000 people and less than one-fifth the size of Rhode Island.

A $100 million purchase of a majority stake in Omai Bauxite Mining from the government of Guyana by Chinese mining company Bosai Minerals Group. Bauxite is a sedimentary rock from which aluminum is extracted.

The construction of Trinidad & Tobago's prime minister's official residence and the National Academy for the Performing Arts by the Shanghai Construction Co.

The number and magnitude of investments has left some mystified.

At a recent dinner between Caribbean leaders and a Chinese delegation, Jamaican officials asked, “‘What does China want from us?’” a person who was at the meeting told GlobalPost. “That’s the big question that everyone has about this: Why?"

Caribbean governments have welcomed the investment — particularly the development aid — partially because other sources have dried up. For example, aid from the United States to members of CARICOM — a bloc of 15 Caribbean states and five associate Caribbean countries — has been falling since the 1980s, said Richard Bernal, former Jamaican ambassador to the U.S. and current director for the Caribbean at the Inter-American Development Bank in Washington.

“What you are seeing in the Caribbean from China was mainly economic aid at first and now it’s starting to diversify into other areas, like tourism," he said.

Bernal believes China's motivation for targeting the Caribbean is diplomatic.

"There are few countries around the world that have maintained ties with Taiwan, and 12 of them are in Central America or the Caribbean," he said. Of the 23 countries to keep formal diplomatic ties with Taipei, six are in the Caribbean: Belize, the Dominican Republic, Haiti, St. Lucia, St. Kitts & Nevis, and St. Vincent.

China’s ambassador to Barbados, Wei Qiang, told GlobalPost that China has no interest in competing with other world powers in the Caribbean. Rather, it sees the islands as fellow developing countries and potential partners.

“The Caribbean countries form an important part of the developing countries world, so to speak. One pillar of China’s foreign policy is to increase the unity with fellow developing countries. In that sense, the Caribbean is a fundamental part of that strategy,” he said.

But it appears China has received little in return. Unlike other regions that China has targeted, like Africa and South America, the Caribbean largely lacks the commodities the rising superpower craves. The Caribbean is not a major producer of raw materials or food. Tourism is almost universally the economic driver.

And with relatively little buying power — the total population of the 39 islands is about 40 million, about 3 percent of China’s population — the Caribbean will not be a major importer of China’s goods.

Take Grenada. Among the Spice Island’s largest exports are nutmeg, cloves, ginger and cinnamon, hardly the basis of the Chinese economic expansion. Its population is under 110,000. China has 655 cities of at least 100,000 people, according to a 2010 report by Deloitte.

Yet, the island has seen an influx of Chinese money since the building of the cricket stadium in 2007.

“The Chinese government and private companies are stepping in finance projects, big projects, that were stalled due to the recession,” said Richard Simon, press secretary to Prime Minister Tillman Thomas.

Simon could not name the projects because the sides are still negotiating terms. “We believe that the relationship with the People’s Republic of China can only grow. China will be the main country to deal with going forward,” he said.

Aside from those major investments, Simon said Chinese business owners are opening convenience stores and restaurants. “On the streets, you’re seeing a presence that you didn’t see just a few years ago.”

The warming relationship has benefited Chinese companies, Ambassador Qiang said, but “these are small markets and small countries and we don’t have huge amounts of trade in terms of volume. From the point of view of diversification of our foreign trade partners, we think all these markets are worth working on as far as we can.”

Residents of the islands seem to have a different take. Tomas Lora, who drives a cab in Santo Domingo, Dominican Republic, said a few months ago the company he drives for upgraded its vehicles to a fleet that looks and rides like a Toyota. “It’s not, it’s a Chinese car,” he said. “You wouldn’t know the difference because it looks like a Corolla. But they say it costs about half as much as a Toyota.”

“You’re seeing Chinese products everywhere in the last few years,” he said. “It’s all ‘Made in China.’”

 

http://www.minnpost.com/globalpost/2011/04/22/27699/why_is_china_spending_billions_in_the_caribbean

 

 

 

http://www.minnpost.com/globalpost/2011/04/22/27699/why_is_china_spending_billions_in_the_caribbean