I'll be honest. I don't understand what is going on with the labor situation on the U.S. West Coast.
There are allegations that labor has slowed down since Nov. 2014. Labor has said they didn't slow
down their work, that cargo didn't move due to a chassis shortage, or something along that line.
Now the terminals, or carriers (one never know who is in charge) has decided to teach the union a lesson,
and has decided to not hire labor to work ships for 4 days, because they would need to pay a lot of extra overtime due to the holidays. The shipping companies haven't been making money for several years, the daily cost of vessels has decreased immensely due to all the competition, so I guess they are happy to go along with this position.
There is probably something behind all this posturing, but it doesn't seem to be really strategic, more like a couple of kids on the playground not agreeing to work together to get a baseball game going.
News reports say the only sticking point in the contract negotiation is the arbitration clause. It doesn't make a lot of sense, but neither the union nor the Pacific Maritime Association are putting out anything which really makes a lot of sense.
If anyone has any inside information on what is going on, feel free to share.
Matson will buy Horizon Lines. Prior to the acquisition, Pasha will purchase the Hawaii trade lane from Horizon. I suspect this is because if Matson took over the Horizon Hawaii service, it would not be approved because it would be a monopoly (although Horizon says this was done to reduce debt).
Horizon Lines To Be Acquired By Matson For $0.72 Per Share In Cash November 11, 2014 CHARLOTTE, N.C., Nov. 11, 2014 /PRNewswire/ -- Horizon Lines, Inc. (OTCQB: HRZL) ("Horizon") today announced it has entered into definitive agreements with each of Matson Inc. (NYSE: MATX) ("Matson") and The Pasha Group ("Pasha"). Under the Matson agreement, Matson will acquire all outstanding shares of Horizon Lines for $0.72 per share in an all-cash transaction. The acquisition price represents a premium of approximately 89% over Horizon's closing stock price on November 10, 2014. The Matson agreement has been unanimously approved by Horizon's Board of Directors and Horizon shareholders representing 55% of the fully diluted equity, which also represents 41% of the outstanding voting common stock on November 11, 2014, have agreed to vote their shares in support of the transaction. Under the Pasha agreement, Pasha will acquire Horizon Lines' Hawaii trade lane business, prior to closing of the Matson agreement, for approximately $141.5 million in cash. The proceeds from the Pasha transaction will reduce Horizon Lines' debt obligations prior to closing of the Matson transaction, at which time Matson will acquire all of the outstanding shares of Horizon Lines and repay the remaining debt outstanding at closing. The Pasha agreement has been unanimously approved by Horizon's Board of Directors. As a result of the transactions, Matson, Inc. will acquire all of Horizon Lines' business operations, except for the Hawaii trade lane business. The two transactions taken together are valued at approximately $598 million on an enterprise value basis. Matson will fund its transaction from available borrowings under its bank credit facilities and existing cash on hand. Pasha will fund its transaction from a committed debt financing agreement. There are no financing conditions to either transaction.
The bankers decided to not give OW Bunker more money, after the announcement yesterday
of extensive losses due to fraud and mismanagement.
They will file bankruptcy. This is only 8 months after their IPO.
OW Bunker (OW) A/S, a Danish shipping fuel provider that went public in March, has declared bankruptcy and reported two employees at its Singapore unit to the police following allegations of fraud. “The board of directors and management deeply regret to inform that it has not been possible to find a sustainable solution,” the company said late yesterday in a statement. As a consequence, OW Bunker A/S, O.W. Bunker & Trading A/S and O.W. Supply & Trading A/S will file for bankruptcy, it said. OW Bunker said Wednesday shortly before midnight it had lost $275 million through a combination of fraud committed by senior executives at its Singapore office and poor risk management. Trading in its shares was suspended on Nov. 5 and the company said its banks had refused to provide more credit. Just eight months ago, investors drove OW Bunker’s shares up 21 percent in their first day of trading, following an initial public offering that valued it at almost $1 billion. Police in Denmark are still trying to establish the jurisdiction of the case and whether fraud was actually committed, Inspector Michael Kjeldgaard said yesterday by phone. His office wasn’t aware of any case having been filed with police in Singapore, he said.
It will be interesting to follow the outcome of this investigation. From Bloomberg News
OW Bunker, which provides fuel to the marine industry, said shortly before midnight local time it had lost $275 million through a combination of fraud committed by senior executives at its Singapore office and poor risk management. Its shares have been suspended since yesterday and the company says its equity has been wiped out. Just eight months ago, investors drove OW Bunker’s shares up 21 percent in their first day of trading, following an initial public offering that valued it at almost $1 billion.OW Bunker, which provides fuel to the marine industry, said shortly before midnight local time it had lost $275 million through a combination of fraud committed by senior executives at its Singapore office and poor risk management. Its shares have been suspended since yesterday and the company says its equity has been wiped out. Just eight months ago, investors drove OW Bunker’s shares up 21 percent in their first day of trading, following an initial public offering that valued it at almost $1 billion.
Hamburg Sued to purchase CCNI container line and agencies
Press Release from Hamburg Sued
Compañía Chilena de Navegación Interoceánica S.A. (CCNI) with headquarters in Valparaiso, Chile and Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft KG (HSDG) with headquarters in Hamburg, Germany are pleased to announce that they have signed a preliminary agreement whereby HSDG will acquire the container liner activities of CCNI including the related general agency functions subject to Due Diligence, execution of a Sale & Purchase Agreement and approval by the competent authorities. This acquisition is scheduled to be executed by the latest on December 31, 2014.
HSDG intends to strengthen its liner network to and from South America by integrating the CCNI liner services. Merging the dedicated and experienced workforce of CCNI and HSDG will help to create an even stronger organization that will provide a first class service to the customers of both companies.
Following the transaction CCNI will continue its non-liner shipping activities including the car carrier and ship-owning business.
BEIJING, June 17 -- An application by three leading global shipping firms to build an operational alliance has been rejected by China due to monopoly concerns, the Ministry of Commerce said on Tuesday.
Major container shipping lines, Maersk Line, Mediterranean Shipping Company and CMA-CGM, in October 2013 agreed to establish an operational alliance named P3 Network to provide customers with more frequent and flexible services. The network would involve three trade lanes: Asia-Europe, Trans-Pacific and Trans-Atlantic.
The network was expected to start operation in the second quarter of 2014, but will be subject to approvals by various authorities, including the European Union, United States and China.
The ministry supports companies to sharpen their competitive edge, but when firms try to improve market share through a "concentration of undertakings", it should be carefully studied, said a statement on the ministry's website.
The three operators handed in the application to the ministry on September 18, 2013 for a "concentration of undertakings" anti-monopoly probe.
Not sure what's going on behind the scenes, but finally the Waterfront Commission is keeping up the pressure, and people are folding. No wonder the ILA has been so intent on keeping the Container Royalty Fund intact.
From The NY/NJ Waterfront Commission
Longshoremen Plead Guilty To Extortion Conspiracy Involving Christmastime Tribute Payments
May 21, 2014
NEWARK, N.J. - Three former longshoremen
admitted today that they conspired to extort others in Local 1235 of the
International Longshoremen’s Association (ILA) for Christmastime
tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern
District of New York U.S. Attorney Loretta E. Lynch announced.
Salvatore LaGrasso, 58, of Edison, N.J.;
Michael Nicolosi, 45, of Staten Island, N.Y.; and Julio Porrao, 71, of
Palm Coast, Fla. – all former supervisors on the New Jersey piers –
pleaded guilty today to conspiring to extort Christmastime tributes from
the union members – count three of the second superseding indictment
against them. LaGrasso, Nicolosi and Porrao entered their guilty pleas
before U.S. District Judge Claire C. Cecchi in Newark federal court.
According to documents filed in this case and statements made in court:
During their guilty plea proceedings,
LaGrasso, Nicolosi and Porrao admitted that they conspired with each
other and others to compel tribute payments from ILA union members, who
made the payments based on actual and threatened force, violence and
fear. The timing of the extortions typically coincided with the receipt
by certain ILA members of “Container Royalty Fund” checks, a form of
year-end compensation. LaGrasso and Nicolosi were suspended from their
positions following their arrests in this case. Porrao had already
retired from his employment on the New Jersey piers at the time of his