South East Shipping News

Maersk Line to acquire Hamburg Süd in cash deal worth up to $5bn

According to vesselsvalue.com, Hamburg Süd’s fleet of 44 vessels, all operating north-south services in the Latin America market, is valued at $1.44bn.

By Mike Wackett 01/12/2016
Maersk Line today announced it is to acquire Hamburg Süd in a cash deal one analyst claims could be worth up to $5bn.

“We estimate the takeover price in a range from $3bn-$5bn, which would increase Maersk’s leverage from 1.2x to around 1.6x full year 2017 EBITDA,” said Jeffries in a research note.

Maersk’s acquisition of the world’s seventh-biggest carrier would lift its capacity to 3.8m teu, from its current 3.1m teu, giving it an 18.6% global share.

The financial implications are harder to gauge, given the highly secretive nature of Hamburg Süd as part of Germany’s private Oetker Group.

“Profitability of Hamburg Süd hasn’t been disclosed, but we suspect it is depressed in the low container freight rate environment,” Jeffries said.

“As a result, the takeover would only create value if profitability would recover, through a combination of significant cost synergies and a potential recovery of container freight rates,” added the analyst.

The deal, following a recent wave of industry consolidation, will leave only 13 global carriers, compared with 20 at the start of the year.

According to vesselsvalue.com, Hamburg Süd’s fleet of 44 vessels, all operating north-south services in the Latin America market, is valued at $1.44bn.

The carrier recently made a foray into the east-west trades, but Maersk Group chief executive Soren Skou said today that “no decision had been made” on whether these services would continue after the completion of the acquisition of the German carrier at the end of next year.

Mr Skou told The Loadstar this morning that the “strong Hamburg Süd, Alianca and CCNI brands” would be maintained in Latin America, subject to regulatory approval, and that the east-west business “would fall within the 2M [alliance]”.

According to Alphaliner, Hamburg Süd purchases more than 2,000 slots a week from UASC, Cosco and APL as part of its global liner service offering on the Asia-Europe, transpacific and transatlantic trades.

These slot-charter agreements are set to end next April with the formation of the new vessel-sharing alliance structure, and it is difficult to see how Hamburg Süd could maintain its east-west market.

“Hamburg Süd is a very well-run and highly respected company with strong brands, dedicated employees and loyal customers,” said Mr Skou. “It complements Maersk Line, and together we can offer our customers the best of two worlds, first of all in the north-south trades.”

Chairman of Hamburg Süd Group, Dr Ottmar Gast, said the decision to “divest its engagement in shipping”, which can be traced back for 80-years, “was not an easy decision for my family”.

A separate statement from Oetker Group said continuing “active participation” in the shipping sector “would entail an even higher capital requirement”, which would “make the balancing of risk within the Oetker Group business portfolio more cumbersome”.

It added that in its view Maersk was “the ideal partner to preserve and further develop the shipping company’s successful business model”.

Mr Skou confirmed that the Hamburg Süd head office in Hamburg would be maintained, although he did not elaborate on integration of offices around the world, or the carrier’s 6,000-strong workforce, other than to pledge a “light touch”.

Mr Skou also hoped for synergies for Maersk’s terminal operation, APM Terminals, from the takeover.

He refused to be drawn on the acquisition price, other than to confirm that it was an “entirely cash transaction” with “no need to sell assets”.

Subject to obtaining regulatory approval from China, South Korea, Australia, Brazil, the US and the EU etc – a process expected to last until the latter part of next year, Maersk hopes to close the transaction by year-end 2017.

Product tankers, tramp, and other shipping-related operations made up around 7% of Hamburg Süd’s $6.7bn revenue in 2015. Mr Skou said there were “no plans for them as yet”. It is assumed they will be disposed of shortly after the takeover.

Mariel Now Allowed to Compete in Transshipment

By Gavin van Marle
24/10/2016
Prospects of the Cuban port of Mariel capturing US transhipment volumes have significantly improved since the US government last week lifted a ban on foreign vessels calling at US ports within 180 days of calling at Cuba.
The US Treasury’s Office of Foreign Assets Control (OFAC) and Commerce Department’s Bureau of Industry and Security (BIS) issued a general licence, waiving the restriction as part of the ongoing programme to restore relations between the two countries.
Treasury Secretary Jacob Lew said: “President Obama’s historic announcement in December 2014 charted a new course for a stronger, more open US-Cuba relationship. The treasury department has worked to break down economic barriers in areas such as travel, trade and commerce, banking, and telecommunications.
“Today’s action builds on this progress by enabling more scientific collaboration, grants and scholarships, people-to-people contact, and private sector growth. These steps have the potential to accelerate constructive change and unlock greater economic opportunity for Cubans and Americans.”
Secretary of Commerce Penny Pritzker added: “These amendments will create more opportunities for Cuban citizens to access American goods and services, further strengthening the ties between our two countries.
More commercial activity between the US and Cuba benefits our people and our economies.”
The lifting of these restrictions is also key to the development of the deepwater container terminal at Mariel, close to the Cuban capital of Havana, which has set itself the target of winning US transhipment cargo from the new neo-panamax vessel sizes now using the enlarged Panama canal.
At the recent TOC Americas Container Supply China event, Charles Baker, general director of TC Mariel, the PSA International-managed container terminal at the port, said lifting the embargo would “allow shippers and their 3PLs to reconsider the overall cost of their deepsea supply chains”.
While some ports on the US east and Gulf coasts have invested heavily in dredging access channels to accommodate the larger ship sizes, others that have yet to complete these programmes, and Mr Baker claimed the Cuban port was ideally located to serve as a first port of call on Asia-US east coast services and act a as a feeder point for ports such as Mobile and New Orleans.
“The normalisation of trade between Cuba and the US is something that is good for the entire region because more investment will come into the region from US companies,” he added.

Tea Party fail!

Huge news: Infrastructure funded, ExIm Bank Restored

President Barak Obama took another step down the path of history recent when he signed a bill that would fund America's roads, bridges and mass-transit systems and revive the charter of the U.S. Export-Import Bank over the objections of conservative Republicans.

The Senate where signs of wisdom still exist, voted 83 to 16 to approve the $305 billion legislation hours after the bill cleared the House of Representatives by a margin of 359 to 65, thanks to the election year. As the first long-term U.S. highway bill in a decade, the Fixing America's Surface Transportation Act, or FAST Act, represents a rare victory for bipartisanship in Congress.

"It proves to the American people that we can get things done," said House Transportation Committee Chairman Bill Shuster, a Pennsylvania Republican. The legislation returns the EXIM Bank to operation over conservative opposition that allowed its charter to expire on June 30. The agency, which helps U.S. companies with foreign competitors, would have its charter renewed through Sept. 30, 2019, but with a lower lending limit and other reforms.

Boeing Co, EXIM's biggest beneficiary, and General Electric Co have warned that the loss of agency support could cause them to move manufacturing jobs out of the United States. Ethiopian Airlines [ETHA.UL] also expressed concern in September about its ability to take delivery on Boeing jets without EXIM support.

The new act drew accolades from Republicans for providing $280 billion in funding for infrastructure projects from the Highway Trust Fund without increasing the federal gasoline tax.

Democrats cautioned that the modest spending increases would not be enough to fully address the nation's crumbling roads, bridges and rail systems. To avoid higher taxes, the bill's authors opted for a series of controversial measures including a transfer from the Federal Reserve's surplus funds, an increase in customs fees and a requirement for the Internal Revenue Service to use private tax collection agencies.

The measures would leave the Highway Trust Fund with $10 billion at the end of 2020, according to the nonpartisan Congressional Budget Office. A number of add-on provisions in the legislation were the subject of intensive lobbying by the transportation industry and safety advocates.

RoRo grows from Mexico, Latin America and Caribbean with USA services at Port Everglades

 

 

Port Everglades Welcomes SC Line’s Caroline Russ RoRo Ship

Media Contact: Jose Pardo | CMO (Chief Marketing Officer) O: +507 282-5700 USA O: +1 305 767-1900 M: +507 6671-9069 [email protected]  |  www.scline.com

Ocean RoRo carrier SC Line consolidates and reaffirms its USA SERVICE commitment from BrowardCounty’s Port Everglades to Mexico, Panama, Colombia, and the Caribbean with the arrival of its new Roll On / Roll Off cargo ship, M/V Caroline Russ, to the South Florida seaport. 

Founded by the Sola Matas family in 2006, SC Line began operating at Port Everglades, FL, in 2012, servicing OEMs and the NVOCC community at large by transporting self-propelled new & used vehicles, trucks, heavy equipment as well as project static cargo on mafi roll trailers from South Florida to Latin America and the Caribbean.

“SC Line has a proven track record that includes reliable service and professionalism,” said Port Everglades Deputy Director Glenn Wiltshire. “We appreciate their business and look forward to continued success with the Caroline Russ.”

The 10,488-gross-ton RoRo ship sails every other Friday from Port Everglades beginning February 14. The ship has capacity for 190 trucks, 470 cars and 120 20-foot containers (TEUs) on chassis.

Fast Terminal, the land based supply chain integrated services business unit of the SC Group, www.fast-terminal.com, operates at Port Everglades as the cargo handler and terminal operator for SC Line. Fast Terminal features a specialized RoRo terminal with several value added services for the port´s trade community such as VPC, EPC, FTZ and transit storage with a capacity of 1,100 bays. The latter earmarked and tailor-made with the OEM auto, truck and heavy equipment industry in mind. Thanks to its ocean liners weekly service and rail connectivity through the FEC, CSX, BNSF, NS, the terminal serves as an ideal OEM inventory transshipment & processing point of service for the SE United States, Caribbean, Central & Northern part of South America´s markets.

About SC Line

The SC Line Group, founded in 2006, started its activities moving trucks between Mexican, Colombian, Panamanian and Peruvian ports with two major pillars: Reliability and attention to detail.

In 2008, the group began a regular fortnightly RoRo service between Mexico and Colombia for the truck manufacturer Navistar/International. Superb performance on its itineraries, unfettered operational excellence, backed by a powerful cloud / android based information system quickly moved SC Line to the forefront of this trade on the Roll on Roll off segment in the MexicanGulf area. With its young and fresh, dynamically adaptive management style, SC LINE earned the trust of major truck and auto manufacturers in the Americas.

In the present day, SC Line is headquartered in Panama, featuring full commercial and operational offices in the United States, Colombia, Mexico and Venezuela.

It is noteworthy that one of its business units, SC Chartering, has become an important carrier contributor by transporting oil and gas, wind power and renewable energy solutions to several projects in the Panama & Central America region.

SC Line offers a very reliable transport service but it also delivers high quality products that have been awarded by current OEM senior executives who highlight SC Line’s flexible and professional portfolio of services.

PMA, ILWU Announce West Coast Waterfront Contract

PMA, ILWU Announce West Coast Waterfront Contract

By: AJOT | Feb 23 2015 at 05:59 AM | Ports & Terminals  

FMCS, Cabinet Secretaries Played Key Roles

The Pacific Maritime Association and the International Longshore and Warehouse Union today announced a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports. The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh. The parties will not be releasing details of the agreement at this time. The agreement is subject to ratification by both parties.

 

“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”

Pressure begins on shippers, union to settle U.S. West Coast ports dispute

 

BY STEVE GORMAN

 

(Reuters) - Two U.S. Cabinet secretaries joined congressional leaders, three governors and a big-city mayor on Wednesday in pushing shipping lines and the dockworkers' union to settle a contract dispute that has led to months of turmoil and cargo backups at 29 West Coast ports.

Labor Secretary Tom Perez and Commerce Secretary Penny Pritzker weighed in as emissaries of President Barack Obama, who has come under rising political pressure to intervene in a conflict that has reverberated through the trans-Pacific commercial supply chain and could, by some estimates, cost the U.S. economy billions of dollars.

Worsening cargo congestion that the union and shippers blame on each other has slowed freight traffic since October at the ports, which handle nearly half of all U.S. maritime trade and more than 70 percent of the country's imports from Asia.

More recently, the shipping companies have sharply curtailed operations at the terminals, suspending the loading and unloading of cargo vessels for night shifts, holidays and weekends at the five busiest ports.

Work has continued around the clock in the dockyards, rail yards and terminal gates for most of the ports. Some smaller ports remained open to nighttime vessel operations as well.

The union and shipping companies each accuse the other side of instigating the disruptions to gain leverage in contract negotiations that have dragged on for nine months, appearing to hit a roadblock in the last two weeks.

ARBITRATION CITED IN SNAGGED TALKS

The bargaining agent for the shippers and terminal operators, the Pacific Maritime Association, has said talks hit a snag over a union demand for changes in the system of binding arbitration of contract disputes.

The International Longshore and Warehouse Union, representing 20,000 dockworkers, has insisted that an accord was near in the negotiations, which a federal mediator was assigned to oversee last month.

Perez joined the San Francisco talks for the first time on Tuesday, according to his spokeswoman, Xochitl Hinojosa, urging the parties to "come to an immediate agreement to prevent further damage to our economy."

He was joined for another round of talks on Wednesday, she said, by Pritzker and Los Angeles Mayor Eric Garcetti, whose city encompasses the nation's busiest cargo port and lies adjacent to the No. 2 cargo hub at Long Beach.

Sources familiar with the situation said Perez huddled with each party separately, then briefly together on Tuesday, and met with both sides again on Wednesday as negotiations and "sidebars" stretched into the evening.

Meanwhile, the governors of the three West Coast states - California, Oregon and Washington - all Democrats, issued a statement on Wednesday welcoming Perez' involvement and calling for a quick resolution to the dispute.

Separately, eight congressional Republicans who chair House or Senate panels with jurisdiction over transportation and labor sent a letter to Obama on Wednesday urging him to take further unspecified action if a settlement is not reached by March 2 - two months from the date the federal mediator was appointed.

A Senate Commerce Committee spokeswoman, Lauren Hammond, said the letter's reference to "exercising additional leadership to resolve the situation" could be interpreted to mean invoking the 1947 Taft-Hartley Act.

Under that law, a president can seek a federal court order compelling the end to a work stoppage in a labor dispute if it poses a national emergency. But labor law experts have said it would be difficult to make such a case to a judge under current circumstances.

The union and the PMA have declined public comment since a federal mediator called for a news blackout last Friday.

The last time contract talks led to a full shutdown of the West Coast ports was in 2002, when the companies imposed a lockout that was lifted 10 days later under a court order sought by President George W. Bush under Taft-Hartley.

 

MCA rules for crew service on yachts

The MCA requires that all yacht service be documented in the form of either (a) yacht service testimonials supported by a discharge book or (b) an MCA-approved logbook. Both of these documents must include an exact breakdown of the actual sea service, stand-by service, and yard time. For the purposes of the MIN, the MCA service definitions are:

• Actual Sea Service is time spent at sea, which may include time at anchor or river and canal transits associated with a passage.
• Stand-by Service is time immediately following a voyage while the vessel is under preparation for a subsequent voyage.
• Yard Time is time when standing by a build, refit or repair.
• Watchkeeping Service is actual sea service spent as a watchkeeping officer in full charge of a navigational watch for at least four out of every 24 hours while the vessel is engaged on voyage.

The MCA states that seagoing service on yachts will be counted as a combination of actual sea-service, standby service and yard service. There are a few restrictions:

• Stand-by Service cannot exceed the number of days performed on the previous voyage and in no case exceeds a maximum of 14 days in each period.
• Yard Service cannot exceed a maximum total of 90 days for Officer of the Watch (OOW) and 30 days for Chief Mate or Master.

As a result of the above definitions, under no circumstance can stand-by service exceed actual sea service.

Now that the MCA has defined what type of sea service is required, let us review the requirements for the three levels of unlimited tonnage licenses.

To qualify for the issue of an OOW unlimited Certificate of Competency, the candidate must, from the age of 16, have completed 36 months seagoing service. Of that total, it must include at least six months engaged in bridge watchkeeping duties on vessels (including yachts) of more than 24m in length or more than 80 GT.

To qualify for the issue of a Chief Mate unlimited Certificate of Competency, one must have completed 18 months seagoing service as a deck officer while holding an OOW unlimited license. Sea service must be attained on vessels (including yachts) of more than 24m in length or more than 80 GT.

To qualify for the issue of a Master unlimited Certificate of Competency, the candidate must have completed 18 months seagoing service as a deck officer while holding a Chief Mate unlimited license. The sea service must be attained on vessels (including yachts) of more than 24m in length or more than 80 GT.

If an officer already possesses an OOW unlimited or a Chief Mate unlimited Certificate of Competency, and is serving on a yacht, there are additional stipulations to complete before raising to a higher Certificate of Competency. The license holder’s seagoing service requirements listed above must include the completion of:

• At least six months on yachts of 500 GT or more operating beyond UK-categorized waters, or if outside the UK, beyond the harbor limits; OR
• At least six months on vessels of at least 24m, made up of voyages of more than 300 nautical miles.

If a candidate has sea service on a yacht of over 3,000 GT that has spent more than 2/3 of its time proceeding to sea, then that sea service can be counted as per MGN 92 (M), i.e. at the full rate. A breakdown of the vessel’s movements must be provided with the application. This will be assessed by the MCA on a case-by-case basis.

If an officer already holds an MCA OOW for yachts less than 3,000 GT and the officer is applying for an OOW unlimited Certificate of Competency, it is not required to show evidence for six months of watchkeeping duties.  If the candidate does not hold an MCA OOW for yachts less than 3,000 GT, one will need a letter from the captain stating that the candidate has been engaged in watchkeeping duties under the supervision of a qualified officer for at least six months.

If one holds an OOW, Chief Mate, or Masters Certificate of Competency limited to yachts of less than 3,000 GT, the officer must first obtain an OOW unlimited license before progressing to a Chief Mate unlimited Certificate of Competency. It is not possible to skip over any of the unlimited licenses.

And finally, the MCA clearly states in the MIN that completing more than four hours watchkeeping within a 24-hour period cannot be counted as more than one day watchkeeping time. For example, if an officer completes a 12-hour watch within a 24-hour period, the officer can only count this as one day of watchkeeping service. Additionally, if the same officer completes two separate six-hour watches within a 24-hour period, the officer can only count this as one day of watchkeeping service.

Capt. Jake DesVergers is chief surveyor for International Yacht Bureau (IYB), an organization that provides flag-state inspection services to yachts on behalf of several administrations. A deck officer graduate of the U.S.MerchantMarineAcademy at Kings Point, he previously sailed as master on merchant ships, acted as designated person for a shipping company, and served as regional manager for an international classification society. Contact him at +1 954-596-2728 or www.yachtbureau.org. Comments on this column are welcome at [email protected].

 

New rules for Cuban trade

TOMORROW Updated Cuban Assets Control Regulations Take Effect

By Jennifer Diaz on January 15th, 2015
Posted in Export, Import, International Travel, OFAC
cuba map
Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced it is amending the Cuban Assets Control Regulations, 31 C.F.R. part 515 (the “CACR”), which will be published in the Federal Register tomorrow, January 16, 2015, at which time the changes will take effect.

You can review the changes that will be published tomorrow here.

This is important, as it means the changes announced by OFAC tomorrow will be effective as of tomorrow, January 16, 2015, but, the Congressional response to those changes is still unknown.

OFAC is implementing policy changes announced by the President on December 17, 2014, which include “facilitating authorized travel to Cuba by U.S. persons, certain authorized commerce, and the flow of information to, from and within Cuba”.

OFAC also published a number of Frequently Asked Questions​ pertaining to this regulatory amendment.

Stay tuned, tomorrow, we will go through the changes and what is now legal.

Gridlock from strikes on Left Coast ports but no sign of overflow on east coast

US shippers say West Coast ports near gridlock on stalled contract talks
By: Reuters | Jan 13 2015 at 04:44 PM | Ports & Terminals

Cargo traffic at several of the biggest U.S. West Coast ports has slowed to near gridlock, negotiators for shipping lines and terminal operators for 29 ports said as contract talks with the dockworkers’ union remain strained.

Union officials however have denied staging slowdowns, saying some of decisions by managements such as cutting back on night shifts were responsible for the gridlock.

The Pacific Maritime Association (PMA) said that five of the region’s largest ports, including the massive Los Angeles and Long Beach docks, have seen backups “approaching complete gridlock.”

Management has accused the International Longshore and Warehouse Union (ILWU) of orchestrating some slowdowns to bolster its leverage at the bargaining table in talks that have been under way for eight months.

“The ILWU slowdowns and the resulting operational environment are no longer sustainable,” said PMA spokesman Steve Getzug in a statement.

“The PMA has a sense of urgency to resolve these contract talks and get our ports moving again,” he added.

Union officials point instead to factors such as a shortage of tractor-trailer chassis used for hauling cargo from ports to warehouses and other management errors as causing the backups.

“Longshore workers are ready, willing and able to clear the backlog created by the industry’s poor decisions,” ILWU President Bob McEllrath said in a statement.

“The employer is making nonsensical moves like cutting back on shifts at a critical time, creating gridlock in a cynical attempt to turn public opinion against workers,” he added.

A federal mediator is currently involved in the negotiations between the association and the union, which represents some 20,000 dockworkers. The workers’ latest contract expired on June 30. (Reuters)

Basic of the Cuba deal

The US and Cuba have announced a broad agreement between the countries that will be a first and historic step toward normalizing relations after more than 50 years of hostility. Here are the basics of what each country has agreed to, as is known so far:

Mariel Port, major competition

What the US will give Cuba

Diplomatic opening: The U.S. will take steps toward restoring diplomatic ties with Cuba, severed since 1961. The travel ban will still be in place, as will the embargo, but the embargo's impact will be eased. And some preexisting exceptions to the travel ban will be expanded.
Embassy in Havana: This will include the goal of reopening a US embassy in Havana in the coming months. The embassy has been closed for over half a century.
Release alleged Cuban spies: The US will release three Cubans who were convicted of espionage and imprisoned in the US: Gerardo Hernandez, Luis Medina, and Antonio Guerrero. All three prisoners were members of the "Wasp Network," a group that spied on prominent members of the Cuban-American community. CNN reports that Hernandez, the group's leader, was also linked to the downing of two two civilian planes operated by Brothers to the Rescue, a U.S.-based dissident group.
Easing business and travel restrictions: The U.S. will make it easier for Americans to obtain licenses to do business in Cuba, and to travel to the island. CNN reports that the new rules still won't permit American tourism, but will make it easier to visit for other purposes.
Easing banking restrictions: Americans will be able to use credit and debit cards while in Cuba.
Higher remittance limits: Americans will be able to send up to $2000 per year to family members in Cuba. Cuban-American remittances are a major source of income for many Cuban families.
Small-scale imports of Cuban cigars and alcohol: US travelers will be able to import up to $400 in goods from Cuba, including $100 in alcohol and tobacco products.
Review of basis for sanctions: Secretary of State John Kerry has been ordered to review Cuba's status as a "state sponsor of terrorism." If his review determines that Cuba no longer deserves that status, that will be a first step towards lifting at least some US sanctions.
What Cuba will give the US

Release Alan Gross: US contractor Alan Gross had been imprisoned in Cuba for the last five years on charges of attempting to undermine the Cuban government. His detention has been a major issue for the US and the Obama administration. He has been released and is on his way back to the United States.
Release political prisoners: Cuba will release 53 political prisoners from a list provided by the United States. CNN also reports that Cuba is releasing a US intelligence source who has been imprisoned in Cuba for more than 20 years, but it is not clear whether that individual was one of the 53 included on the list.
Increased internet access: Cuba will allow its citizens increased access to the internet. The US has long sought this as a means of increasing pressure within Cuba for democratic reform.
Access by the UN: Cuba will allow officials from the United Nations and the International Committee of the Red Cross to return to its territory.
POLITICS

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The basics of the major new US-Cuba deal