The Somali Pirates told the truth

The New York Times is now reporting the Somali Pirates were telling the truth about tanks which were destined for Southern Sudan onboard the MV/Faina which they hijacked.

This from my blog in Feb. 2009

Thursday, February 5, 2009
Pirates release M/V Faina

Finally, after 5 months, the ship carrying tanks and arms will be released.
Kenya says the cargo is theirs. I am sure there will be intense interest as to where this armament ends up.

And this from the New York Times, Dec. 8, 2010

KHARTOUM, Sudan — It was September 2008 and a band of Somali pirates made a startling discovery.

Kenyan security officers guarded T-72 tanks that were offloaded in Mombasa from the Faina. The ship was also found to be carrying 150 grenade launchers and 6 antiaircraft guns.

The Ukrainian freighter they had just commandeered in the Gulf of Aden was packed with weapons, including 32 Soviet-era battle tanks, and the entire arsenal was headed for the regional government in southern Sudan. The Ukrainian and Kenyan governments vigorously denied that, insisting that the tanks were intended for the Kenyan military.

But it turns out the pirates were telling the truth — and the Kenyans and Ukrainians were not, at least publicly. According to several secret State Department cables made public by WikiLeaks, the tanks not only were headed to southern Sudan, but they were the latest installment of several underground arms shipments. By the time the freighter was seized, 67 T-72 tanks had already been delivered to bolster southern Sudan’s armed forces against the government in Khartoum, an international pariah for its human rights abuses in Darfur.

Hapag-Lloyd plans to sell stock

Hapag-Lloyd has contacted some investment banks, with the idea to do an IPO (Initial Public Offering) to sell stock.

At the moment it is owned by TUI (which is involved primarily in group travel), and after the financial problems last year, Klaus-Michael Kuehne, the principal of Kuehne & Nagel, took a major financial stake in Hapag-Lloyd, as part of an investor group.

From The Journal of Commerce

TUI has repeatedly said it wants to dispose of its stake in Hapag-Lloyd to focus on tourism. The company, based in Hanover, Germany, hasn’t been able to find a buyer. The increase of its stake is the result of the conversion of a hybrid loan for Hapag-Lloyd into equity, according to the company’s statement in September.

A spokesman for TUI didn’t immediately respond to a phone call seeking comment.

A Hamburg-based investor group, including German billionaire Klaus Michael Keuhne, M.M. Warburg, HSH Nordbank and Hamburg’s state government, bought a majority stake in Hapag-Lloyd.

click here for link to article

ILA admits Mob still a problem on NY/NJ docks

From the Journal of Commerce, who has covered the Waterfront Commission hearings.

Mob ‘Schemes’ Persist on Docks, Monitor Says
Joseph Bonney | Dec 2, 2010 10:24PM GMT

............

“The schemes are still there. … If you eliminate that, you’re going to bring the costs down,” said Robert C. Stewart, deputy administrator of International Longshoremen’s Association Local 1588, which has been under a court-appointed monitor since 2003.

Stewart testified in the last of six hearings the Waterfront Commission of New York Harbor held to highlight no-show jobs and other practices it says drive up costs and invite Mafia influence at the port.

I guess the Waterfront commission hearings are over. This is how it wrapped up.

The hearings ended with the display of several complex charts detailing family and other connections between Genovese crime family members and ILA officials and members that Commissioner Ron Goldstock said included a “privileged few” who received high pay for relatively little work.

Stewart testified that the court-appointed administrators at Local 1588 struggled to break a “culture of corruption” reinforced by decades of Genovese crime family control. He said the mob used its influence over company hiring agents to demand payoffs for jobs and training and relief assignments that led to higher-paying jobs.

He said Local 1588 members used to have to buy tickets to an annual Christmas party of Nicholas Furina, a hiring agent who was banned from the docks after pleading guilty to extorting union members for jobs. He said that practice was banned after the monitors took over.

“People think that if there’s not gunplay down on the piers and people getting beat up and thrown in the river, things must be OK. That’s not the case,” Stewart said.

So, it's improved a little from the days of "On The Waterfront", but not by much.


click here for link to article

Need a job? Apply to be an independent inspector

The Waterfront Commission of New York Harbor (as they call themselves) is taking applications for;

"expressions of interest and statements of qualifications in being considered for appointment as independent private sectors inspector general"

click here for link to explanation and application form

Deadline is Dec. 31, 2010

I suppose that should be enough time for any established company to apply.

These "independent inspectors" will be hired by a stevedore company, who has in the past, had some "questionable" owners. It's the Waterfront Commissions idea of the way to keep organized crime off the Waterfront. Apparently all of the stevedores companies currently licensed are operating under temporary licenses. (as mentioned in my post of Nov. 15

all (stevedoring) companies doing business in the Port were operating on short-term temporary licenses, which were intended to be used only in special circumstances.

I just don't know any companies who would really be in this business, but maybe there are some law firms who might be interested.

I especially like the list of "area of expertise" one can choose from.

Here's the first few

-Accounting/Audits/Financial Review

-Shipping

-Organized Crime

-Unions

-Construction


I guess they listed them in order of most important. I'm not sure.

Don't believe everything you hear

I don't known what to say. The Transpacific Rate Agreement has told it's members how much they should increase their rates. All this does is give ammunition to all the carriers to say " look, I will give you less than the other guys".

Moeller Maersk A/S, the world’s largest container line, and 14 other shipping companies agreed to seek rate increases of $400 per 40-foot box on Asia-U.S. west coast routes next year as the rebounding global economy revives cargo demand.

The planned increase is part of voluntarily guidelines covering talks for contracts generally starting around May 1, the Transpacific Stabililzation Agreement said in a statement on its website yesterday. The shipping group, which has limited antitrust immunity, also recommended a peak-season surcharge of $400 per box.

from bloomberg

Waterfront Commission Hearings Continue

The hearings held by the Waterfront Commission continue.

The Journal of Commerce is reporting. I haven't yet found another source.

Here is what the JOC reports occurred today.

International Longshoremen’s Association official Harold Daggett said there’s nothing wrong with off-contract deals that the Waterfront Commission of New York Harbor says provide favored dockworkers with high pay for relatively little work as ILA shop stewards and timekeepers.

“I wish all the members earned more than $400,000,” Daggett testified in a Waterfront Commission hearing. “These guys work their asses off out there.”

Ok, so I think "well, he's just blowing smoke, wanting to look like he is speaking up for the Union workers.

But then there is this.....

At the start of Thursday’s hearing, Daggett insisted on reading a 10-minute statement criticizing the agency, created in 1954 to combat waterfront crime. “The Waterfront Commission treats us all like we are criminals,” he said. “Their main focus is on harassing our membership and beefing up their numbers. … This is the closest thing to communism that you will see in the United States of America.” At another point he likened commission practices to “McCarthyism or SS all over again.”

Commissioner Ron Goldstock said previous hearings documented non-contract pay agreements that “funnel huge amounts of money to a privileged few and as a consequence adversely affect the ability of the port to be competitive.” Goldstock noted that about a dozen relatives of the late Genovese crime boss Vincent “Chin” Gigante hold lucrative jobs on the waterfront, including ILA shop steward positions at the port’s three largest terminals.

Daggett defended Ralph Gigante, a nephew of the late crime boss. Ralph Gigante, a Local 1804-1 shop steward at Port Newark Maintenance & Repair, testified at a previous hearing that he is paid for 168 hours a week, mostly at overtime rates, and expects to collect about $400,000 this year.

So, I don't know if this guy was drunk, or smokin' something, or maybe just not taking his meds. But, it certainly appears he is livin' in a fantasy world.

click here for link to article

No Stevedore Company in NY/NJ properly licensed

A year later, the Waterfront Commission is getting around to addressing problems outlined in a report by the New York State Inspector General Joseph Fisch, issued in August 2009. Click here for link to the report.

In the letter dated Sept. 29, 2010 from the Waterfront Commission (their letterhead says of New York Harbor, LOL, considering the majority of the terminals are in New Jersey), they mention the little problem with the Stevedore Companies.

all (stevedoring) companies doing business in the Port were operating on short-term temporary licenses, which were intended to be used only in special circumstances.

I'm not really clear on how they will handle this. It appears that initially they thought they would start running the necessary background checks to get the stevedores properly licensed.

Then, it appears (although this is not clear), that they found out there are too many who won't pass the test.

So now it looks like they will maybe let the stevedore companies who have problems which would keep them from passing the background check, you know, things like "exhibited criminal influence, improper accounting and/or hiring practices," they would let these companies hire IPSIG (Independent Private Sector Inspector General).

Oh my. Has no one learned a thing?

But, I can see the problem. Who are you going to get to act as a Stevedore?

I think the Port is taking applications.

Maybe someone reading this will put together a company and apply.

Waterfront Commission initiates arrests

If you have been reading this blog, you know the NY/NJ Waterfront Commission has been holding hearings this month.

Apparently, when they were preparing for the hearings, they decided they had enough evidence to arrest a couple of guys.

This from The Waterfront Commission web-site

October 13, 2010

Lasher Arrested for Conspiracy to Commit Wire Fraud

Waterfront Commission Detectives and Special Agents from the United States Department of Labor today arrested Pedro Del Valle, Jr., an employee of Island Securing and Maintenance Inc, on a charge of Conspiracy to Commit Wire Fraud. The Complaint alleges that between September 2008 and February 2010, Pedro Del Valle, Jr. was a full-time employee of both Island Securing and Verizon, Inc. and that on numerous occasions Del Valle knowingly and intentionally indicated on sign in sheets that he was working at New York Container Terminal during the same periods of time when records maintained by Verizon indicate that he was working there. The Complaint also alleges that on numerous occasions, Del Valle called in sick, took disability leave, or took family leave from his job at Verizon when in fact he was working at New York Container Terminal on those days. Defendant, together with others, caused direct deposit payments to be wired, in interstate commerce, from a Verizon account in Pittsburgh, Pennsylvania to defendant’s account in New York for the purpose of executing the above scheme.

The case is prosecuted by the United States Attorney’s Office for the Eastern District of New York.

And....

October 19, 2010

ILA Local 1 Trustee and Shop Steward charged with Theft
in the Second Degree and Falsifying Records.

On October 19, 2010, William A. Vitale, a shop steward at Maher Terminals and Trustee for ILA Local 1, was charged with theft of over $75,000 by deception, a crime of the 2nd degree, and falsifying records, a crime of the 4th degree.

The complaint alleges that Vitale created a false impression that he was working at Maher Terminals, and he was paid for such work when, in fact, he was not working. Vitale was also alleged to have intentionally deceived Maher Terminals, by causing false payroll records to be submitted.

The case is being prosecuted by the New Jersey Attorney General’s Division of Criminal Justice.

Containers Overboard

From The Journal of Commerce

Storm knocks 26 containers overboard en route from Asia to UK

A Maersk container ship was waiting in the French Port of Le Havre Friday to have its cargo secured after it lost 26 containers overboard on Tuesday in a powerful storm in the Bay of Biscay.

The maritime prefecture in Cherbourg said the Maersk Sembawang lost the containers overboard from the last row of boxes stacked at its stern and suffered damage to 49 more when it ran into the storm.

Be sure to click here for the article, and then click on the link to the French Language news which has a picture of the ship and the containers which tumbled.

Of course, hoping yours was not one of them.

I wonder if Maersk will declare General Average? I doubt it, no one does these days.

Air Cargo carriers fined by EU

The list of the aircargo carriers fined for price fixing has been made known.

They are; Air France-KLM, British Airways, Cargolux, SAS, Singapore Airlines, Air Canada, Quantas, LAN Chile, Martinair, and Japan Airlines.

From DW World

The European Union's competition watchdog issued fines Tuesday to 11 airlines totaling 799.4 million euros ($1.1 billion) for running a global cargo cartel.

The cargo carriers were found to have coordinated their action on surcharges for fuel and security over a six-year period, between 1999 and 2006.

Air France-KLM was hit with the largest fine of 310 million euros. British Airways came in second, having to pay a 104-million-euro penalty. Luxembourg's Cargolux will have to pay 79.9 million euros, while Scandinavian carrier SAS was ordered to pay 70.2 million euros.

Other airlines involved in the cartel and slapped with fines were Singapore Airlines, Air Canada, Quantas, LAN Chile, Martinair and Japan Airlines.

The Commission said it dropped charges against eleven other airlines, including German carrier Lufthansa and its subsidiary Swiss Air, because it was the first to provide information about the cartel.

ILA makes threats to keep jobs

The ocean carriers have made moves to get rid of providing chassis in the U.S., as this is the only country in the world (that I know of), where the carrier supplies the chassis.

This has upset the ILA in NY/NJ as it will move the responsibility of the chassis maintenance (I guess) from the carrier to the truckers, or another company, which is not obligated to use the ILA.

Kinda like what happened when the ILA lost the business of loading cargo into containers. The ILA is not competitive, and if someone can find a cheaper way to do it, the business goes elsewhere.

From The Journal of Commerce.

International Longshoremen’s Association official Harold Daggett said he’s ready for “war” with container lines transferring intermodal chassis service to companies outside the union’s coastwide master contract.

“They’ve declared war with me and I’m going after all of them,” Daggett said in an interview Tuesday.

“There’s going to be a war here. I’m going to take on all of these lines that say they’re getting rid of the chassis,” he said. “If they think they’re going to create a European situation where they’re getting out of the chassis business, it’s not going to happen, not on my watch.”

He said the ILA may seek fines of $2,000 per container against carriers it claims are violating the union contract. He said the ILA also may conduct “thorough, thorough inspections” of boxes placed on chassis of companies that haven’t signed the contract.

So, he makes his threats, known and also implied (if anyone with experience working in NY/NJ, you know what an "implied" threat is from the ILA.... you might be wearing concrete shoes very soon).

And more from Daggett

“This is not a slowdown I’m talking about. We’re just going to show them we have the right to inspect these containers so that they’re safe for the highways,” Daggett told The Journal of Commerce.

“I’m not threatening anybody but this is our work and our jobs, this is our livelihood and I will fight for every member of the ILA to protect our jobs. That’s what they elected me for.”

So, if this isn't a threat, what is it?

This is who is will be coming after.

Daggett said any ILA action would be aimed only at carriers that have shifted chassis maintenance and repair to companies that haven’t signed the ILA contract. Leasing companies and chassis pool operators use ILA labor in New York-New Jersey and other ports but can hire non-ILA labor elsewhere because they aren’t part of the coastwide contract signed by carriers.

Maybe the Waterfront Commission will look into this.

Someone needs to inform the ILA that the way to keep jobs is by learning be do it better, and cheaper, than someone else.

And more from the NY/NJ Waterfront

Oh, this is just so funny. Tony Soprano would be smacking them up the side of the head.

More from the Waterfront Commission hearings, as reported in the Journal of Commerce.

"I don't like the idea that the Waterfront Commission wants to run my business. That's what you guys want to do," American Stevedoring CEO Sabato Catucci told a commission hearing. "If you want to run my business, buy me out and take me over and you try to get more productivity out of the port."

Catucci testified in the fourth in a series of hearings the agency has held to highlight what Commissioner Ron Goldstock said was "literally alarming" evidence of no-show jobs, favoritism in hiring and organized crime influence that "adversely affects the ability of the port to be competitive." ILA officials are scheduled to testify Nov. 18.

Catucci and Jim Devine, chief executive of GCT USA, which owns Global Terminal and New York Container Terminal, took issue with what they saw as suggestions that mobsters dominate the port.

and here's the clincher

"There is no goddamn organized crime influence on the day-to-day decisions we make, in any way, shape or form," Devine said.

Oh, so not the "day-to-day", but just the monthly stuff?

NY/NJ Terminal Operators and the ILA

You just can't make this stuff up!

The Waterfront Commission is now trying to do it's job (since they have been threatened with being made extinct), and have started questioning the employment practices on the waterfront.

The most recent abuse which came to light are the timekeepers, which are generally paid for more than 24 hours a day, as they are apparently doing the job of 3 people.

When questioning the terminal operator why this can't job can't be computerized to save money, here was the discussion, are report in the Journal of Commerce.

Terminal executives disputed Goldstock's (from the Waterfront Commission) suggestion that ILA timekeepers and shop stewards have undemanding jobs that allow them to collect pay of up to $464,000 for working only a few hours a day at jobs they got through inside connections. Devine said NYCT once tried to hire fill-in timekeepers and "burned through about a half-dozen people that couldn't do the job."

Couldn't the work of a timekeeper with six-figure pay be done by a skilled data entry worker making $20 or $25 an hour? Goldstock asked.

"Those people don't have an ILA contract," Curto replied.

HA HA HA

I guess that just gives an indication of what caliber of people belong to the ILA.


click here for link to article

Airlines facing fine for price fixing

Apparently several airlines were operating an illegal cartel from 2001 until 2006.

None of the airlines mentioned are U.S. owned.

Lufthansa will escape fines, as they are the one who informed the authorities of the cartel.

From The Journal of Commerce

Air France KLM and British Airways, which were fined $350 million and $300 million respectively in the U.S., are among airlines facing substantial fines from the EU.

Cathay Pacific, Japan Airlines, Alitalia and All Nippon Airways have confirmed they have been investigated.

Lufthansa, Europe's largest cargo carrier, is not facing a fine as it informed the Commission about the cartel's activities.

NY/NJ Port Time Keepers paid for 25 hours a day

In case you didn't really notice from previous articles, the no show jobs at the NY/NJ Ports are sanctioned in the contract between the ILA and the Port Operators.

Now, something equally strange is sanctioned in these contracts.

Paying Timekeepers for more than 24 hours in one day.

From The Journal of Commerce

Paul Buglioli, head timekeeper at Ports America’s terminals in the port, testified he’s paid for 25 hours a day and earned $462,685 last year. Babchik identified 10 other timekeepers in the port who were paid over $200,000 last year, including hours they don’t work.

Buglioli said he and other timekeepers at Ports America terminals log in dockworkers for several shift starts per day, including weekends and holidays, and input their names and work codes for nearly 100 pay categories. “We only have four timekeepers … We should have about 10 timekeepers to do the work we’re doing,” he said.
...............
Commission attorney Paul Babchik testified that timekeepers – International Longshoremen’s Association clerks who tally and report dockworkers’ hours for companies’ payrolls – are paid under arrangements that vary among terminals. Timekeepers typically are paid whenever workers are on the job at a terminal.

click here for link to complete article

Ripped from the headlines...the mob and the waterfront

The from the Newark (New Jersey) Star Ledger

The Waterfront Commission held a hearing into mob influence along the docks today. But some of the scenes could have ripped from newsreel footage of the commission’s 1950’s heyday, right up to that old standard: "On advice from my counsel, I hereby assert my privilege against self-incrimination under the 5th Amendment of the United States Constitution."

It was among the highlights of the first day of public hearings following a scathing Inspector General’s report last year finding that the commission’s former leadership was "a sanctuary of political favoritism, corruption and abuse."
.................
Aulisi is the son of a former International Longshoreman’s Association Local 1235 president, Vincent Aulisi, who commission officials say installed his son in a no-show job as a checker, or dockside clerk, at the APM terminal in Elizabeth. On a projection screen in the crowded hearing room, commission officials showed photographs of the son barbecuing and riding a lawnmower while he was scheduled to work. The commission eventually barred Aulisi from working on the waterfront for associating with Coppola.

"Isn’t it true that you had a no-show job at APM?" Demeri asked Aulisi.

""On advice from my counsel, I hereby assert my privilege against self-incrimination," he replied, repeating that same response, word-for-word a half dozen times in response to a half-dozen questions.

Testimony from Joseph Curto, president of the New York Shipping Association, a trade group, detailed labor practices codified in bargaining agreements between stevedoring companies and the longshoremen’s union. The commission officials say the practices allow for and even encourage excessive pay for little or no work, depending on the position.
lesniak-waterfront-commission.jpgNoah K. Murray/The Star-LedgerN.J. State Sen. Ray Lesniak seen on the floor of the Senate session before a vote is cast for his affordable housing bill in June.

For example, a relief checker, Eddie Aulisi’s typical job title, is paid whether or not he is providing relief, and is not required to be on-site even during the loading or unloading job he is assigned to.

Another industry official, Richard Carthas, senior director of terminal operations for APM, Aulisi’s former employer, acknowledged that he had fired other longshoremen for infractions like excessive sick days or attitude problems yet kept Aulisi on his payroll despite knowing he rarely, if ever, worked.

And people wonder why it's so expensive to work a ship in New York/NJ ports?

click here for link to article

Waterfront Commission gets to work..finally

A couple of weeks ago, as reported in The Journal of Commerce

(New Jersey)State Sen. Raymond Lesniak, a Democrat, said he will introduce a bill Thursday to dissolve the watchdog agency and transfer its powers to the Port Authority of New York and New Jersey.

Apparently the Waterfront Commission has decided they better get to work to save their jobs.

ILA shop steward's work week: 168 hours

A nephew of the late boss of the Genovese crime family testified that he receives hourly pay for 168 hours a week, even when he's home sleeping, while collecting $400,000 a year as an International Longshoremen's Association shop steward at the Port of New York and New Jersey.

Ralph Gigante Jr., a shop steward at the maintenance unit at Port Newark Container Terminal, said he's paid whenever ILA workers are on the job. He said he gets the regular $33 an hour for 40 hours, double pay for three hours a day of meal breaks, and time-and-a-half for each week's remaining hours, plus two yearly bonuses, including one for 16 paid holidays. He said he doesn't claim pay for the 10 to 12 times a year when he plays golf.

Gigante testified Thursday in the second of a series of hearings by Waterfront Commission of New York Harbor to highlight what commission officials say are no-show jobs, favoritism in hiring and organized-crime influence at the East Coast's busiest port.

Oh, so the Waterfront Commission just now came across this bit of information?

This is just too depressing and ludicrous to even discuss.


click here for link to complete article

CMA CGM may get new stockholder

CMA CGM has been looking for an investor for quite some time.

In the beginning they were looking for loans, but as time goes on, appears they may have decided it's necessary to sell some of the company to get some badly needed money.

From The Journal of Commerce

Turkish family owned company may buy 20 percent stake for $500 million

French ocean container carrier CMA CGM is close to agreeing to the sale of a 20 percent stake to Turkish family owned company Yildirim for $500 million, according to French media reports.

An agreement could be signed by the end of this week and CMA CGM would receive payment at the end of November, French financial daily Les Echos reported.

Reports of an imminent deal follow the collapse of negotiations with several potential bidders over the past six months, including Colony Capital, a U.S. investment group, Belgian billionaire Albert Frere and Qatar Holding.

The French government's strategic investment fund, FSI, is expected to invest in CMA CGM after the carrier reaches agreement with Yildirim.

CMA CGM declined to comment on the reports.

Look at your service contract

I have mentioned before shippers/importers need to take a close look at their service contracts.

Many companies complained this last year they were unable to get space, that carriers were not honoring the terms of their contracts.

I don't know specifics, I can only offer my advice from working for both a shipper and a carrier.

Read this article from the Journal of Commerce, and in the next few days I will be offering my suggestions.

Lines learned lesson in 2009; shippers must adjust to capacity cuts, says consultant

Container lines are putting profits ahead of market share, a change that is redefining shipper-carrier relations, Drewry Shipping Consultants said in its Annual Container Market Review & Forecast.

“The basic contract between shipper and carrier should no longer be seen as a straight rate deal. … A combination of slow steaming, fewer weekly strings and increasing vessel-sharing agreements between carriers means that the traditional carrier-shipper partnership has changed forever,” said Neil Dekker, editor of the annual report.

With carriers more focused on profitability, shippers now need to think beyond the “volume is king” approach and work together with their partners on meaningful forecasts and reward-based contracts,” the Drewry report said.

click here for link

Forecast Dry Bulk Shipping

Of course everyone stares into the crystal ball to try and see the future for shipping. The bulk ships have seen quite an improvement, but there are new ships coming out of the yards, with 2012 being a critical year, perhaps creating overcapacity once again.

Some say shipping will be what pulls the Greek economy out of the mess it's in.

Hellenic Shipping News has a lengthy report on Dry Bulk market.
This is just one part.

N.Cotzias Shipping Group examined the potential overcapacity of dry bulk tonnage and how it will impact the freight markets. According to Cotzias, the expected ships until the end of 2010 are alarming, with 6 VLOC’s of 1.8 million tons, 61 Capes of 11 million tons, 21 Post Panamaxes of 2.1 million tons, 74 Panamaxes of 6 million tons, 153 Supramaxes of 9 million tons, 7 Handymaxes of 300,000 tons, 201 Handies of 6 million tons and 221 bullkers (between 10,000 and 20,000 dwt) of 2 million tons, not to mention an additional smaller dry bulk carriers (including MPP, General Cargo) of 400,000 tons. In total until the end of the year, the additional carrying capacity of the global dry bulk fleet, based on the expected deliveries should be 38.6 million tons, a figure difficult to be offset by the increased cargo demand. Of course, the economies of the developed world haven’t to contribute to global shipping trades, with China still ruling the fortunes of rates.

click here for complete article

Longshoremen pay Union Boss for better jobs

In researching the recent arrests of Longshoremen smuggling drugs off the dock (mainly in Port Elizabeth, I gather), I ran across this article which appeared in the Star Ledger in April 2010.

A top official in a longshoremen’s union and a Newark police officer were arrested today as part of an ongoing investigation into corruption at seaports in New Jersey, authorities said.

Nunzio LaGrasso, 59, of Florham Park allegedly extorted money from dock workers by demanding cash for better jobs. Every Christmas, workers would be forced to pony up hundreds or even thousands of dollars to get better shifts, more overtime or higher-paying assignments, according to authorities.


"Our investigation revealed that longshoremen were between a rock and a hard place when it came to paying tribute to these alleged criminals," Attorney General Paula Dow said. "They could either pay up or they could forget about better assignments, higher pay and overtime."

And yet, the Union pretends it helps the Longshoremen.

Drug Smuggling and stock fraud by NY/NJ Longshoremen

From The New York Times

8 Longshoremen Charged With Smuggling Cocaine

In exchange for cash, drugs and other benefits, the longshoremen would secretly unload cocaine hidden among the everyday merchandise shipped to the six berths that make up the ports of New York and New Jersey, the busiest on the East Coast, prosecutors said. The longshoremen were paid $50,000 to $100,000 for unloading a single duffle bag of cocaine, Mr. Bharara said.

To unload the narcotics, prosecutors said, the longshoremen placed the containers where authorities could not see them. After breaking customs seals to remove the drugs, the longshoremen would replace them with new ones, prosecutors said.

.......
During the inquiry, prosecutors said, they also uncovered an illegal stock-trading scheme after learning that a longshoreman received money from others to put toward a penny stock. Investigators discovered a “pump-and-dump” scheme in which people were promoting stocks on Facebook and Twitter to create excitement and get people to purchase them.

The stocks were actually weak, prosecutors said, and after the participants in the scheme sold them off, they quickly lost value. While the participants in the plot earned more than $3 million, the subsequent investors lost $7 million, prosecutors said.

I guess what's shocking, is this is not shocking.

It's business as usual on the NY Waterfront. The only difference since the movie "On The Waterfront" is, the docks are mainly in NJ, and the cargo comes inside containers.


click here for link to NY Times article

YRC reverse stock split

The proposed 25 for 1 reverse stock split of YRCW stock took place today.

The new symbol is YRCWD, and opened at 6.00 a share.

From The Journal of Commerce

Without the reverse stock split, YRC Worldwide faced delisting by the Nasdaq stock exchange, which requires companies to maintain a $1 minimum share value.

For most of the year, YRC's stock traded between 76 and 11 cents a share, hovering in the 20-40 cent range in recent weeks. A year ago it traded at $4.45 a share.

click here for link to article

Ports at New Jersey/New York return to work

From The Journal of Commerce

The two-day work stoppage at the six container terminals in the Port of New York and New Jersey ended early Wednesday afternoon when the Philadelphia ILA local whose picket lines had caused the shutdown of the terminals called off the picketing.

click here for complete article

Teamsters Union in talks with YRC

Least anyone think I bash all Unions (after the previous 3 posting), I have something good to say about the latest actions of the Teamsters.

They appear to be living in the "real world", and over the last year have been trying to keep YRC out of bankruptcy.

From The Journal of Commerce

Proposed agreement on pensions, wages would give union broad veto power over management decisions

The Teamsters union is offering to extend its current contract with YRC Worldwide for two years and accept dramatically reduced pension contributions in return for an unprecedented say in the management of the nation's largest trucking operator.

The union would extend the current suspension of pension contributions, set to expire Dec. 31, until May 31, and then require the company to resume contributing to its multiemployer pensions at 25 percent of the rate in effect in July 2009.

The union proposal also would make significant changes to YRC's work rules and make them uniform across all of its regional and supplemental agreements — a major issue for the company, which deals with several bargaining units.

The agreement would extend the National Master Freight Agreement until 2015. Wage increases already scheduled for 2013 and 2014 would take place, but wage levels would be cut by 15 percent, matching the levels agreed to last year.

The company's board agreed to the plan, which now must be approved by YRC Worldwide's Teamsters employees. A vote by the Teamsters rank-and-file is expected later this month. The concessions are aimed at helping the struggling company avoid potentially crippling pension costs and survive 2011.

In return, the Teamsters National Freight Industry Negotiating Committee would receive effective veto power over the company's plans to recapitalize and over any transactions that may occur in the restructuring of YRC Worldwide.

And, from Bloomberg News

YRC Worldwide Board of Directors Approves Tentative Labor Agreement and
Reverse Stock Split

Correction- ILA shuts down all terminal work at NY/NJ

Yesterday I wrote that the truckers were the ones hurt by the ILA strike, that the ships were still being loaded/unloaded. This was incorrect.

Apparently all work stopped on the terminals.

And, despite a court injunction yesterday afternoon, there is yet again no work today.

Yes, the ILA is thumbing their nose at the court, and, I guess they can't read, because there is a "no strike clause" in their contract.


What thugs. Yes, thugs.

Next thing you know they will be bashing out car windows with tire irons.

From The Journal of Commerce

The New York Shipping Association went to court Tuesday afternoon to seek an injunction against the work stoppages, which was granted by Judge Debevoise.

“We feel strongly that these actions by the ILA, in refusing to cross a non-bona-fide line, are a violation of the no-strike clause of our current collective bargaining agreement,” said Joseph C. Curto, president of the New York Shipping Association, in a statement issued Tuesday. “We further believe these actions are completely irresponsible and accordingly we will explore all possible remedies to end this illegal action.”

ILA action hurts truck drivers

The ILA stopped trucks from going in and out of the gates in NY/NJ, but didn't stop ships from working.

So, they didn't really hurt the carriers, but instead, the independent truck drivers

From NJ.com

"We came up to inform people what is going on in Camden," said Joe, one of 14 longshoremen from the Port of Philadelphia.

Beverly Fedorko, a spokeswoman for the NYSA said she expected the terminal to reopen tomorrow.

Bradley Homman, 45, of Clearfield, Pa., parked his truck on Port Jersey Boulevard near the entrance to the terminal and said he plans to "beat the traffic" when the gates open tomorrow.

He said expects to lose $200 in earnings because of the one-day stoppage. "There is a lot of people who are going to be mad because they are closed, Homman said. said. "Everyone is going to lose a day's work."

ILA Thugs stop gates at NY/NJ terminals

From The Journal of Commerce

Longshoremen protest pending Del Monte move to non-union facility

Updated 1:30 p.m. ET 9/28/10

Picket lines by longshoremen from Philadelphia caused work stoppages at all six container terminals in the Port of New York and New Jersey on Tuesday, when terminal workers who are members of the International Longshoremen's Association refused to cross the Philadelphia ILA picket lines despite a court injunction issued on Monday.

The Philadelphia longshoreman were picketing the terminals to protest the pending move by Del Monte Fresh Produce of 75 ship calls a year from an ILA terminal in Camden, N.J. to a non-ILA facility in Gloucester, N.J. that is owned by the Holt family. The Philadelphia ILA claims the Del Monte move will cost the union 200 jobs.

The Philadelphia ILA members shut down work at the New York Container Terminal on Staten Island, APM Terminals and Maher Terminal in Port Elizabeth, N.J., the Port Newark Container Terminal, Global Marine Terminal in Bayonne, N.J., and the Red Hook Container Terminal in Brooklyn. The only terminal that remained open was the passenger cruise terminal.

I just don't know what to say.

First off, despite what the U.S. Government says it has done to "clean up" the unions from Mob influence, it just hasn't happened.

The ILA and the Mob go hand-in-hand, and so, the ILA doesn't know how to do anything to benefit it's members except for heavy-handed tactics.

Too bad they don't learn how to improve productivity, get rid of the incredibly antiquated way of billing carriers and/or terminals. It's sad that the U.S. terminals are so far behind others around the world in terms of productivity. The cost to load or unload a container in NY is more than twice what it is in Rotterdam.

Once the railroads get their trackage increased across the U.S., the ocean carriers will really have some more options to move their containers, and will be able to avoid the Northeast U.S. ports.

The ILA might just be shooting themselves in the foot.

U.S. Anti-Trust for Ocean Carriers under review

Once again, there is talk of changing the U.S. law which allows ocean carriers to get together and talk about rates.

From The Journal of Commerce

Rep. James L. Oberstar, D-Minn., formally launched a battle between shippers and ocean carriers over carrier antitrust immunity, introducing this week legislation that would abolish ocean carriers’ ability to meet and discuss rate guidelines.

The Shipping Act of 2010 would ban ocean carrier discussion agreements while preserving carriers’ ability to form agreements aimed at improving service, such as vessel sharing agreements. The bill also would give the Federal Maritime Commission more authority to mediate and resolve service contract disputes

Well, I say, just deregulate the whole thing, and get rid of the FMC.

First off, giving the FMC more authority, is really a waste of taxpayer money.
We already have lots of courts which deal every day in contract disputes. There is nothing so special about an ocean service contract, from any other type of contract which requires delivery of a good or service.

And, from the ocean carrier side, they would probably be better off not relying so much on what their competitors tell them. They need to learn to look at their business individually, and not rely on what was always industry practice. Or, worse yet, believing "well, if XYZ charges this rate, then if we charge that rate we will make money".

Too many carriers have no idea of their true cost doing business. This last downturn has forced them to look at each piece of business, and finally start making those tough changes.

For example, the policy of ocean carriers supplying chassis in the U.S. is going away. And why not? From what I understand, this practice was only in the U.S., that no where else in the world did the ocean carrier supply the chassis.

Maersk took the hard decision to quit providing chassis, and everyone else will follow. If this decision had been left to "collective agreement", it never would have happened.

So, I say, totally deregulate, and let the market forces play out. For those exporters complaining they can't get containers, or can't get space. Well, what does your service contract spell out?

Oh, you don't have a service contract?

Well, maybe that's the problem.

UPS cargo plane crash- are batteries to blame?

Investigators are trying to determine the cause of the crash in Dubai last week of the UPS freighter. The theory is a there was a fire in the cargo hold.

From the Journal of Commerce

Crash investigators are trying to identify which type of cargo was located near the starboard wing of the three-year-old 747-400 freighter and are trying to determine if lithium batteries were present on the flight, according to report by The Associated Press.
.................
According to the Federal Aviation Administration, there were 113 incidents on both cargo and passenger planes between 1991 and early 2010 involving “smoke, fire, extreme heat or explosion” due to lithium batteries or equipment that uses them.

The Transportation Department in January called for stricter rules for shipping lithium batteries on cargo flights.

I know we are all tempted to discount the possibility of a lithium battery causing a fire, but apparently this is a real possibility.

Packaging and shipping goods for air transport is a very serious business. Too many people sign documents, certifying goods are acceptable for air transport, without really knowing what they are doing, or, worse yet, not caring.

I worked with a guy over 30 years ago, who brazenly put cans of paint in domestic airfreight containers, unmarked, not correctly packaged, and with falsified paperwork.

He seemed quite pleased with himself to save so much money.

I was too young and green to really know the danger, yet, I knew the shipping regulations existed for a reason.

So if you are shipping, or even using something with lithium batteries, take heed.

Kuehne and Nagel, Panalpina, accused of price fixing

Although it's been years (actually decades) since price fixing was legal in airfrieght, some companies can't seem to stop the practice.

From Bloomberg News

New Zealand Indicts Kuehne in Antitrust Suit Against, BaZ Says

New Zealand authorities indicted Switzerland’s Kuehne & Nagel International AG and Panalpina Welttransport Holding AG as well as other logistics companies in an antitrust case, Basler Zeitung reported.

The companies allegedly “artificially” increased air- freight prices from and to New Zealand since 2001, the newspaper said, citing New Zealand’s authorities.

Kuehne & Nagel rejects the charges and will defend itself in court while Panalpina is in settlement talks with New Zealand’s authorities, Basler Zeitung cited the companies as saying.

Will Dubai World sell off port operation?

From Reuters

Documents obtained by Reuters this week revealed the surprising news that the debt-laden conglomerate was willing to let go of "strategic assets" such as DP World, Jebel Ali Free Zone and Dubai Maritime City (DMC) as part of a $19.4-billion fundraising effort as it tries to reach a restructuring deal with creditors by October 1.

By displaying its willingness to put these assets on the block, Dubai World is effectively offering creditors an insurance policy that if the restructuring plan runs into trouble, it will sell core, strategic assets.

click here for link to complete article

Recap First Half 2010

I have been taking a break from writing this blog. It felt as if everyone was just "treading water", with things not really getting better, but not getting any worse.

And, it's still about the same. The ocean carriers are now making money, but many have burned through their cash reserves. There is speculation CMA CGM will be looking for new shareholders,although at the moment they are still trying to get someone to just loan them some money.

The Europeans just did the "test" to see what banks would be in trouble should there be another downturn. The news wasn't too bad, but some people are wondering what the tests really demonstrated.
From the BBC

"What seems to have occurred is a compromise amongst European banking regulators, with many questioning if the bar had been set way too low in testing the European banking sector," said Mark O'Sullivan of foreign exchange firm Currencies Direct.

"It seems the tests may have raised more questions than they have answered and in the coming weeks, it will be the interbank lending markets that will have the real answer as to whether real confidence has returned to the European banks."

And, with the explosion of the BP well in the Gulf of Mexico, it gives one pause as to how much some companies are involved in polluting the world. In particular, Trafigura made the news.

The BBC reports

A Dutch court has found multinational Trafigura guilty of illegally exporting toxic waste from Amsterdam and concealing the nature of the cargo.

In 2006, Trafigura transported waste alleged to have been involved in the injury of thousands of people in Ivory Coast. Trafigura denied any wrongdoing.

Ocean container space is tight coming out of Asia, as the carriers had been smart enough to not add too much capacity. This will last another year, then all the carriers will have short term memory loss, and add too much capacity.

Some things never change.

Like the weather. It's summertime in the U.S., and yet some people are shocked to see the temps in the triple digits.

Go figure.

Aid to Haiti

While watching the evening news, we debated how aid would get to Haiti. Emergency workers with dogs were shown readying to leave from Virginia, but I questioned if the airport would be open, given the devastation.

Apparently the airport is open, but the port suffered damage to the cranes and piers.

From The Journal of Commerce

The first ocean-going vessel on the scene, a Coast Guard cutter from Guantanamo Bay, Cuba, reported Wednesday the port at Haiti’s capital had been badly damaged and that many workers had been killed, leaving the site all but unusable.

Regional operator Seaboard Marine said the port’s cranes and piers had been severely damaged.

Reports said the capital’s main airport still had power and lights, however, allowing emergency flights to get to the country.

Aid from around the globe will have to use the airport or transport goods to the neighboring Dominican Republic, where they will be driven across the border.

click here for link to article

YRC Worldwide averts bankruptcy

This is just too weird.

From Bloomberg

Jan. 1 (Bloomberg) -- Goldman Sachs Group Inc. helped YRC Worldwide Inc. complete a debt swap to avert bankruptcy after the Teamsters union said the bank was trying to profit from a failure of the largest U.S. trucker by sales.

A group consisting of Goldman Sachs, Deutsche Bank AG, Aristeia Capital LLC, Silverback Asset Management and a Smith Management LLC unit, “got us over the goal line by going into the market, buying bonds and tendering them,” YRC Chief Executive Officer Bill Zollars said yesterday.

For those of you who have not followed this saga, here it is in a nutshell.

YRC Worldwide is in financial difficulty. They offered a deal to the bondholders to swap bonds for stock. But, sometime during or before this offer went out (who knows the truth) Goldman Sachs started selling credit default swaps to bondholders, so if YRC Worldwide did go bankrupt, the bondholder would be covered.

So when YRC Worldwide made the swap offer to the bondholders, they couldn't get enough of the bondholders to agree for the deal to go through.

When James Hoffa (son of Jimmy Hoffa), who is president of the Teamsters Union (which represents the truck drivers of YRC Worldwide), got wind of what Goldman Sachs had done, he said some rather unkind things. I believe he also tried to get Congress to do something (good luck there).

Anyway, long story short, apparently there was sufficient pressure to persuade Goldman Sachs to have a change of heart. They bought up bonds to be tendered so the swap could go through,and YRC Worldwide averted bankruptcy.

Now, Goldman Sachs looks as if they were the good guy, but just remember, someone would have had to pay on the credit default swaps if YRC Worldwide had gone bankrupt, so they actually probably made out better in the end. Plus, no telling how much they made on commissions with all the transactions.

And, now they are friends with James Hoffa.

Humm.

Interesting story.

Maybe it will become a movie.

What's ahead - 2010

I hesitate to make any predictions for 2010, but it's kinda fun to gaze into the crystal ball.

Last year I said we would be a recession until 2011.

We are definitely changing into a world economy.

Those of us in the U.S. have not fully understood our impact on the rest of the world's economies. The saying goes "When the U.S. sneezes, ________ (fill in the country name of your choice) gets a cold".

China is very quickly emerging as the dominant economy in the world.

China has already surpassed Greece in purchases of bulk carriers, and now China will build more ships, knocking out Korea who until now was the largest shipbuilder.

Something has to happen in the containership industry, but to be honest, I don't know what. I was surprised that the German government bailed out Hapag-Lloyd, and the French government has said they will help CMA CGM stay in business.

Without this government intervention there would have been considerable consolidation.

The KG funds in Germany are under a lot of pressure. I don't really understand the financial structure of KG funds. I do know that investors get together and buy a ship and operate it (all handled by the KG of course), but it's my understanding up until now there were no funds set aside for losses. How long these ships will stay owned by KG funds, or put up for sale, is anyone's guess.

And new ships continue to come out of shipyards.

So, all in all, 2010 will still be quite difficult for ocean carriers and shipowners.

But, these lean times are good for everyone. It makes companies look at how they do business. They become more efficient and cut costs.

I just hope during this slow time, some of the international shipping companies start upgrading their computer systems.

Maybe FEDEX or UPS should buy an ocean container carrier.