Friday, April 11, 2014

ILA official requests reinstatement after embezzling from union


It's rather amazing this guy even had the guts to request reinstatement.  But, they use to be able to get away with this kind of things.   I trust the union members are secretly happy, but they won't be able to say so out loud.

From the Waterfront Commission

Commission Denies Fomer ILA Local 1233 Secretary/Treasurer's Request for Reinstatement on the Longshoreman's Register After Embezzlement Conviction
April 8, 2014
           The Commission denied the Request for Re-instatement to the Longshoreman’s Register by Gregory “Ronnie” Taylor, former ILA Local 1233 Secretary/Treasurer. Taylor was previously decasualized for failing to meet the work requirements. In support of his Request for re-instatement, Taylor indicated that he failed to meet the work requirements because he held the position of Secretary/Treasurer of Local 1233. On February 6, 2013, in the United States District Court, District of New Jersey, Taylor pleaded guilty to Count 26 of an indictment that charged him with issuing a vacation check for $7,852 to himself without authorization. Taylor also admitted that between 2007 and 2010, while serving as secretary-treasurer, he embezzled a total of $71,000 by improperly cashing duplicate paychecks, as well as other checks from the union’s operating account, including for unauthorized credit card expenditures.
           The Commission denied Taylor’s Request for Re-instatement in that his service as Secretary/Treasurer of ILA Local 1233 could not be considered “good cause” for failing to meet work requirements in that Taylor abused his position as Secretary/ Treasurer and breached his fiduciary duty and obligations to the members of the ILA Local 1233.
           
           
click here for link

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Thursday, April 3, 2014

Hapag-Lloyd and Hamburg Sud revisited

A year ago Hapag-Lloyd and Hamburg Sud broke off merger talks.   

Hapag-Lloyd went on to purchase CSAV.

Now, the chairman of Hamburg Sud is saying perhaps "a three way alliance" might be in
their future.

From Bloomberg News

A “three-way alliance may be on the agenda at some point” after Hapag-Lloyd’s planned takeover of the container-shipping operations of Valparaiso, Chile-based Cia. Sud Americana de Vapores SA, Chief Executive Officer Ottmar Gast said at the carrier’s annual media conference in Hamburg today.
“It would be good to offer a more global product portfolio, so we remain open and interested to manage at some point what we didn’t manage last year,” Gast said.
 click here for link to complete article




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Wednesday, April 2, 2014

U.S. proposed changes to FMC in bill hr4005

The United States House of Representatives has passed a bill (drafted by the transportation committee)
regarding the U.S. Coast Guard, the Federal Maritime Commission (FMC).

The essence of the changes regarding the FMC appears to limit the terms of the commissioners, AND, put restrictions on a Commissioner having any investments in the industry, and prohibits commissioners from holding a job in addition to being an  FMC Commissioner.

It's rather sad this must be added into the law, but can only presume there has been some breach of what should be good conduct by an appointed official.  Well, certainly wouldn't be the first time.

It appears the committee is also trying to figure out why U.S. Flag Vessels are not competitive.
Really?   It's quite sad they are asking the National Academy of Science and the U.S. Coast Guard
to prepare reports regarding this lack of competitiveness.  I guess it will give some academic types something to do.

Here's the short version.  The commercial shipping companies  buy ships built in China, Korea, and places which have really cheap labor,  AND crew their ships with people from countries such as Bangladesh, India, Indonesia.      AND, these companies aren't even making money at the moment.   This should be all that is needed to say, but logic is rarely introduced in Washington, D.C.

click here for the link to U.S. Bill hr4005

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Tuesday, April 1, 2014

Hamburg Süd 2013 Results

 
Here is the complete Press Release from Hamburg Sud.   If you want the truth about the difficulties in shipping, read this.  They do not need to impress future investors, current shareholders, or creditors.  

PRESS RELEASE
 
Hamburg Süd 2013: Doing well under difficult business conditions
 
Overview of Hamburg Süd growth
Hamburg, 1 April 2014. Growth in the global economy and containerised transportation by sea in 2013 was slightly below the level of the previous year. Once again, available global slot capacity outpaced container transport volume as deliveries continue to exceed the level of scrappage, which also increased. As a consequence of the continuing overcapacity, freight rates in most trades remained under pressure or declined still further. The only positive support came from fuel prices, which have fallen slightly from the highest level of the previous year.
Due to subdued market growth and operational problems in the vastly overstretched ports in Brazil, Hamburg Süd and its Brazilian subsidiary Aliança were only able to increase transport volume in liner services by 1 per cent year-on-year to around 3.3 million TEU (1 TEU = 20 foot standard container). With freight rates falling slightly and devaluation of the most important earnings currency (US dollar) by around 4 per cent as against the euro, total revenues of the business field shipping fell by 3.9 per cent to €5.3 billion.
In 2013, worldwide bulk shipping was still marked by substantial overcapacity and transport volumes – particularly to China – falling below expectations, even if there was an apparent improvement towards the end of the year. Overall, Hamburg Süd’s bulk business and product tanker business failed to generate positive results last year. Liner services were slightly better than the previous year, and also performed well by industry comparison.
The number of staff employed by the shipping Group was almost the same as last year at 4,491 employees (previous year: 4,512), of which 686 were at sea. Including those seafarers employed by third-party companies (but excluding trainees), the number of staff employed by Hamburg Süd and its subsidiaries was 5,159.
Despite the unsatisfactory business environment, investments totalling €450 million were considerably above the level of the previous year (€247 million). These investments mainly comprise instalments and final payments for twelve 9,000/9,600 TEU ships and four smaller 3,800 TEU newbuilds.

Business environment
Trust in the European markets was only partially restored in 2013. Continuing high levels of debt in some states contributed towards subdued growth in the eurozone. After the end of the budget crisis in the USA, there was a slight improvement in economic growth and positive developments on the employment markets. The Chinese economy expanded again by around 7.7 per cent, thereby meeting expectations. In contrast, growth in Brazil remained unsatisfactory. Weak economic development, rising interest rates and inflation, and serious infrastructure challenges were a cause for concern. Overall, global economic growth of around 3.0 per cent was somewhat weaker than in the previous year.
Whilst worldwide container transport increased by 3.7 per cent in 2013, global slot capacity increased by about 6 per cent (1.0 million TEU) to 17.3 million TEU. Scrappage reached record levels of around 500,000 TEU in 2013 (over 200 ships), but net capacity continued to grow due to the high volume of newbuild deliveries during the year. Orders also increased again, with new orders in the financial year 2013 for 234 ships with a total capacity of 1.83 million TEU and a total value of USD 16.8 billion, or 1.34 million TEU more than in the previous year. At the end of December 2013, the order book again stood at more than 20 per cent of the worldwide operative fleet capacity. In the segment for 9,000 TEU ships alone, the order volume increased from around 50 to around 150 ships
over the course of just a few months.
Due to substantial overcapacity, charter rates for most ship classes remain under pressure. Average rates for Panamax ships (4,400 TEU gearless) in 2013 of USD 8,700/day were only slightly above the historical low in the summer of 2009, and barely covered operating costs, let alone interest costs and capital repayments. Numerous German shipowning companies became insolvent during the reporting year. Banks offering ship finance still need to make substantial write-downs to their loans.
The overcapacity means that there is no scope for the restoration of freight rates that is so urgently required for liner services worldwide. Increases were only possible for individual services for a limited time. The freight rate recovery for refrigerated goods during the first half-year did not last. Over the course of 2013, rates for most services fell back to a level that is wholly insufficient in light of the high level of investment, operating costs for reefer containers, and on-board equipment.
Fuel prices reached an annual high of USD 646 per tonne during the first quarter 2013. Over the further course of the financial year, the average price for heavy diesel fell to just below USD 600, with an annual average price decline of around 7 per cent.
The business environment for bulk shipping is heavily determined by Chinese coal and ore imports for steel production. In 2013, the People’s Republic imported 801 million tonnes of iron ore and 214 million tonnes of coal. Year-on-year growth was 10.7 per cent and 19.6 per cent respectively. Global bulk transport increased by around 5.5 per cent. At the same time, newbuild deliveries of bulk carriers capacity of around 62 million tdw were considerably lower than in the previous two years (each around 100 million tdw), despite consistently high levels of scrappage of old tonnage. At the same time, there was only a minimal improvement in bulker charter rates during the course of the year. The same applies to product tankers, which failed even to cover operating costs.
 
Hamburg Süd ships and containers
As at 31 December 2013, the Hamburg Süd fleet comprised a total of 154 ships, 45 of which were owned by the Group. Of these, 103 ships were employed in liner services, and 51 chartered-in ships were employed in tramp operations (bulkers, product tankers). During the course of the reporting year, the fleet of owned ships was expanded by the first four newbuilds of a total of six ships in the Cap San series. With a capacity of 9,600 TEU, these are the largest-ever ships in the Hamburg Süd Group. They have 2,100 reefer slots on board, and are therefore the world’s largest reefer capacity vessels. The new ships were introduced into the services between Asia or Europe and the East coast of South America. The Hamburg Süd subsidiary Aliança also introduced four 3,800 TEU ships in the Brazilian cabotage service. These wide-beam newbuilds set new standards for cost efficiency on the South American East coast. Three older Panamax ships of the Bahia series (3,800 TEU) were sold at the end of 2013, and another three at the start of 2014. The available slot capacity in liner services increased by around 6 per cent to approximately 457,000 TEU, and the average ship capacity by 7 per cent to 4,437 TEU.
Hamburg Süd Group is continuing its strategy to further improve the efficiency of its fleet. The increasing average capacity of its vessels is the basis for a constant reduction in cost per slot.
At the end of 2013, the order-book for Group-owned ships to be delivered in 2014/2015 was around 78,000 TEU. The total number of containers remained virtually unchanged year-on-year at around 458,000, thus reflecting the moderate growth in cargo volume.
 
Liner services
Against a background of a strong recovery in freight rates in the worldwide transportation of refrigerated goods, liner services had a much better start than in the previous year. Due to unsatisfactory volume growth and overcapacity in the Asian services, earnings were under considerable pressure during the rest of the year. The growth in carryings was weaker than expected; strikes in Chile at the beginning of the year, overloaded infrastructure in Brazilian ports, and political and economic problems in Venezuela and in Mediterranean countries had a negative impact on cargo operations. The service between Europe and India/Pakistan – which suffered a rather dramatic fall in rates from time to time – was particularly disappointing. Owing to unsatisfactory seasonal business on the Asia routes, many services already adjusted their capacity from the beginning of December in anticipation of falling volumes in the off-season. Some individual routes or whole services are not being offered for several months, and ships are being laid up in order to reduce system costs and to offset at least some of the earnings shortfalls.
Relief came in the form of a slight fall in bunker prices, the successful implementation of service rationalisations, and measures to reduce bunker use.
Overall, Hamburg Süd was able to post a slight year-on-year improvement in results from liner services, although due to rate pressure in the Asia-South America services, the still unsatisfactory development of activities in the Mediterranean and the service between Europe and India/Pakistan, none of our targets with respect to overall earnings have been met.
Tramp shipping
Neither bulk carriers nor product tankers generated positive earnings in 2013. Their results were at the same level as last year.
 
Outlook 2014
Economic conditions should improve in 2014. According to the International Monetary Fund (IMF), the global economy should grow by 3.7 per cent, and world trade by 4.5 per cent, with the US economy in particular set to become more dynamic. In the eurozone, all signs point to some countries coming out of recession, even if high public deficits continue to be a cause of concern in many countries. Despite positive impulses from the soccer world championships, there is no sign of a sustained solution to Brazil’s economic issues. Growth in the Chinese economy will also be of decisive importance over the coming year.
Even if the overall positive outlook as regards the growth of the world economy and trade should turn out to be correct, we do not yet expect a sustained recovery of container liner services over the next year. This is mainly due to continuing increases in overcapacity. Although many liner shipowners and the German shipowning companies that are so traditionally prevalent in the container segment mostly remain highly indebted, the number of orders for new ships is rising again. Indirect government support from the large shipbuilding countries Korea and China, and private equity ­– mainly from the USA – are shoring up ship financing despite the failure of the German KG-company system. The trend towards ever larger and more fuel-efficient ships continues. At the same time, older ships are not being scrapped at a sufficiently comparable rate. The recent revelation of a delay of at least a year in the expansion of the Panama Canal – the expanded canal is not expected to open now until 2016 – will mean that older Panamax vessels will remain in service longer, whilst the newbuilds ready to step into service cannot yet be utilised as originally planned. 
It remains to be seen if the intended pooling of operations of the world’s three leading players Maersk, MSC and CMA CGM on the major East-West routes will be successful in the long run, or if it will provoke similar joint ventures or even mergers.
Hamburg Süd will expand its activities in the core services to and from South America and add to its network where it makes sense. Based on a high owned share of modern ships and containers, the focus of corporate management in 2014 will remain a continual improvement of all cost positions.
This year should see increases in revenues and charter rates in bulk shipping due to uninterrupted global growth in volume of 5–6 per cent per year and a decrease in newbuild deliveries. The tramp business of the Group operated by Rudolf A. Oetker, Furness Withy and Aliança Bulk is expected to increase results in 2014, though not to an acceptable level. The same applies to product tanker operations.
Overall, we anticipate that the shipping Group’s operating result for 2014 will be at about the same level as last year.
The high level of investment to renew the Group’s in IT equipment continues, along with the projects to reduce the environmental impact of our ship operations and improve the sustainability of our business activities. We are preparing our fleet for the introduction of the increased requirements under MARPOL IV as regards reduction of emissions. This includes the use of low-sulphur fuels in coastal waters, and equipping our ships that operate on the US West coast with facilities to receive shore-side electricity. Initially, the additional operational cost of Hamburg Süd will increase by at least USD 40 million per year. Due to the strong pressure on earnings and the overall less than satisfactory results, we will be forced to pass on these additional costs to shippers as surcharges.
 
At www.hamburgsud.com (Press & Media section) you can
download photos relating to various shipping group topics.
 
 
 
For further information please contact:
Hamburg Süd Corporate Communications
Eva Graumann
Willy-Brandt-Straße 59-61
20457 Hamburg
Phone: +49 40 3705-2627
Fax +49 40 3705-2


 


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Monday, March 31, 2014

CMA CGM - did they really increase profit?

The initial headlines hitting the press today are claiming  (as reports the JOC)  " CMA CGM's Net Profit Soars on sale of Port Unit Stake".   But is this true?

The Loadstar takes a much closer look at the reports, and concludes this


However, excluding the asset sale, CMA CGM’s underlying profit tanked by 26.9% against the previous year, to an earnings before interest and tax [EBIT] result of $756m.

click here for link to complete article which is worthwhile

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Friday, March 28, 2014

Zim Shipping lost even more money


Things are tough in the container shipping world.   Although everyone said "things will be better by...2012, then 2013, and now I don't know what people are saying.   Other than the losses have widened and the consolidation has finally started.

As I posted earlier today Hapag-Lloyd is buying CSAV.

Yesterday it was announced that Zim will satisfy  it's creditors by offering them shares.  I guess
it's better than nothing, unless they go bankrupt.   Not sure who would be interested in purchasing Zim,
and I question how much longer it's major shareholder, Israel Corp., will accept the continued loses.  Zim has always been supported by the Israeli government, (for reasons probably best left unsaid here), so I doubt the government would want the shipping company to go away.  But who knows.  There is still El Al.

Reuters has a great report..

click here for link    Repeating below for future reference.


Reuters) - Israel Corp, one of Israel's largest holding companies, reported a wider loss in the fourth quarter due to a smaller profit at its chemicals unit and a larger loss at its shipping subsidiary.
Israel Corp said on Thursday it posted a quarterly net loss of $406 million, compared with a $306 million loss a year earlier.
Shipping unit Zim, which has been hurt by tough economic conditions, lost $282 million in the last three months of 2013, wider than $238 million the prior year. Excluding extraordinary expenses, Zim's loss was $113 million.
Zim, the world's 17th largest shipping industry with a 2 percent market share, is in the middle of a financial restructuring process. In January, the firm agreed to a deal with most of its creditors that will see part of its debt swapped for shares and drop Israel Corp's stake to less than one-third.
The deal will slash Zim's overall liabilities to $1-$1.5 billion from about $3 billion.
During the fourth quarter, Zim's revenue fell to $888 million from $981 million, due to a 13 percent decline in average freight rates.

Zim also said it is in advanced negotiations with Israel's government regarding the cancellation of the state's "golden share", while maintaining the government's interests in a way accepted by the defence ministry.
Chemicals unit Israel Chemicals (ICL), the most lucrative holding and the world's sixth-largest potash producer, earned $195 million excluding one-off items, down 21 percent over the previous year.
Israel Corp last week said it was examining the sale of up to 7 percent of ICL. It currently owns 52.3 percent of ICL, which is planning a New York Stock Exchange listing.
Israel Corp is also the parent of chipmaker TowerJazz and Oil Refineries, and holds a stake in Chinese-Israeli carmaker Qoros.
TowerJazz posted a narrower quarterly profit , while the loss at Oil Refineries narrowed.
Qoros, a joint venture between Israel Corp and Chery Automobile Co, posted a quarterly loss of $144 million, compared with $55 million a year earlier
 

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CSAV Will Disappear

I have been busy with "life", so wasn't paying much attention to the Hapag-Lloyd-CSAV deal.
I thought it was going to be a merger, but apparently Hapag-Lloyd will be buying CSAV.

Am sure when the announcement comes out it will say something about "maintaining the CSAV name", but trust me, it will eventually go away.   Does anyone remember that for a few years it was Maersk-Sealand before Maersk decided to go ahead and drop the Sealand name?

Anyway, here is the article from Bloomberg.    In it they mention Hapag-Lloyd "cut its losses" (which of course means they aren't making money).  Everything will be better when they take over
CSAV and get big enough to compete with Maersk.  If you believe this I have a bridge to sell ya.

For some reason executives always want to believe that "bigger is better".   Probably in the shipping world, bigger will just mean bigger losses.

Here's the article in full (because it will disappear from their site)

click here for link
 
Hapag-Lloyd AG narrowed its full-year loss for 2013 as the company cut costs and benefited from lower fuel prices before a planned takeover that will make it the world’s fourth-largest container carrier.
Losses dropped to 97.4 million euros ($134.7 million) from 128.3 million euros and transport costs fell by 409 million euros, the Hamburg-based company said in a statement. Operating profit grew by 41 million euros to 67.2 million euros, it said.
“Although Hapag-Lloyd continued to perform well compared to other industry players thanks to the positive operating result, this result nevertheless falls well short of our expectations for 2013 and is ultimately disappointing,” said Chief Executive Officer Michael Behrendt said in the statement. “Irrationality” in the trend in rates in the previous year made it impossible “to push through sustainable rate increases in the market from the second quarter, despite good ship utilization at times.”
Hapag-Lloyd, Germany’s industry leader with a fleet of 151 vessels, plans to take over the container shipping operations of Valparaiso, Chile-based Cia. Sud Americana de Vapores SA, or CSAV. The acquisition will help counter the prolonged shipping slump and close the gap on the world’s three largest carriers, including A.P. Moeller-Maersk A/S. (MAERSKB) CSAV, which expects a binding deal by the end of April, will get a 30 percent stake in Hapag-Lloyd in return.
Hapag-Lloyd recorded a 4.6 percent rise in transport volume to about 5.5 million standard 20-foot containers, or TEU. Sales declined almost 4% to 6.57 billion euros from 6.84 billion euros, mainly on a weak dollar, the company said. EBITDA rose by 54.6 million euros to 389.1 million euros.
Behrendt said the industry’s outlook in the coming years looks much “brighter” with container traffic expected to grow 4.4 percent this year and 5.2 percent in 2015.
To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net
To contact the editors responsible for this story: Angela Cullen at acullen8@bloomberg.net James Kraus, Jim Silver

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