Monday, November 25, 2013

EU Investiages Shipping Companies

From Bloomberg News

European Union regulators opened an antitrust investigation into container liner shipping companies, saying they signaled pricing changes to each other with press and website statements.
“Since 2009, these companies have been making regular public announcements of price increase intentions through press releases on their websites and in the specialized trade press,” the EU said in an e-mailed statement today. “These announcements are made several times a year and contain the amount of increase and the date of implementation, which is generally similar for all announcing companies.”
The pricing announcements may allow the companies to signal future pricing plans to each other and could allow them to raise prices on transport services to and from Europe, regulators said.
The European Commission didn’t identify the companies in the probe in today’s statement.
AP Moller-Maersk A/S, owner of the world’s largest container shipping company, CMA CGM SA and Hapag-Lloyd were among companies raided by EU officials in 2011 over possible collusion. EU regulators are also gathering market information over a pact between Maersk, CMA CGM and Mediterranean Shipping Co. to create the largest container alliance.

Shipping companies have not yet understood how they should operate without the price collusion they were accustom to in the old days of conferences.  It's a new world,  but they just don't get it.

Friday, November 22, 2013

CMA CGM posts Third Quarter Financial Results

It looks good on paper.  Note the comment " persistently volatile environment".  
Which is true for all companies in international shipping.  Rough waters ahead.

2013 third quarter financial results

Improvement in operating margin to 6.6%; Record high volumes carried; An effective operating model in a persistently volatile environment

The Board of Directors of CMA CGM Group, the world’s third largest container shipping group, met under the chairmanship of Jacques R. Saadé, Chairman and Chief Executive Officer, to review the financial statements for the third quarter 2013.

During the period, consolidated revenue amounted to $4.1 billion, up 1.4% over the second quarter and down 2.1% year-on-year. Volumes carried rose by 11.0% year-on-year to 3.0 million twenty-foot equivalent units (TEUs), a new historical record for the Group. The average revenue per TEU declined by 11.8% year on year, when Asia-Northern Europe market rates, as measured by the SCFI, contracted by more than 45% over the quarter.

This performance in terms of volumes and price resistance illustrates CMA CGM’s resilience in a market that remains extremely volatile. The Group is evidencing the benefits derived from its size and global presence, which are enabling it to diversify its activities by geography, customer category and service solution, particularly in its onshore operations.

During the third quarter, CMA CGM reported:

- $238 million in consolidated EBIT, versus $541 million in the third-quarter 2012. Excluding non-recurring items, core EBIT stood at $271 million for the period.

- A 6.6% EBIT margin before non-recurring items, one of the highest in the industry.

- $70 million in consolidated net profit for the period, bringing the total to $434 million for the first nine months of the year.

Business in the third quarter contributed to maintaining consolidated cash and cash equivalents at nearly $1.1 billion. Net debt amounted to $3.7 billion as of 30 September, for a gearing ratio of 0.77.

Significant events during the quarter

As part of their future P3 operational alliance, CMA CGM, Maersk Line and MSC Mediterranean Shipping Company SA finalized their operating agreements on the Asia-Europe, Transatlantic and Transpacific trades. As announced, subject to the approval by the various regulatory authorities, these services will be deployed in second-quarter 2014.

CMA CGM has signed a strategic contract with SAP to implement a new information system dedicated to container shipping that will be deployed starting late 2015. This investment will enable the Group to improve its operating performance.

Outlook for 2013

To further strengthen the Group’s liquidity position, an additional $200 million securitization programme was set up in October 2013.

Lastly, Moody’s has upgraded the Group’s rating to B2 with a stable outlook.

Given the usual year-end seasonal variations and currently prevailing freight rates, performance in the final three months of the year will likely see a decline compared with the third quarter 2013.

Financial Highlights

Q3 2012Q3 20132012 year to date2013 year to dateChange (%)
Revenue in $ billions4.24.111.912.0+0.3%
EBIT in $ billions+541+238+828+852+2.9%
Adjusted EBIT* in $ billions+541+271+822+638-22.4%
Consolidated net profit in $ millions+363+70+284+434+52.6%
Return on invested capital***8.3%10.9%8.3%10.9%N/A
Volumes carried in TEU millions**
Fleet (number of vessels412430412430+4,4%
Fleet capacity in TEU thousands*1,4251,5591,4251,559+9.4%

* Excluding non-recurring items (asset disposals and impairment losses)

** TEU = twenty-foot equivalent units

*** Calculated over a rolling 12-month period
0537 | origin_ssl_mode: 0

Investigation Begun- Oil Price Fixing

In my blog post of Sept. 9, 2012, this is what I wrote.

The other item of interest is the price of oil.  It topped $100 the first of the year when everyone thought  the economies were improving (and hedge funds were trading in oil), but then it dropped,  and then came back up.  It's in the 90's now.  It should really be lower, but there is too much manipulation in the market.

And...apparently I was correct!

This from Bloomberg News

Just hope this doesn't get thrown out because of the CFTC blunder.  If I were a shipping company,
I would start a lawsuit against these folks, because they cost you a lot of money in fuel costs.  Well, they cost all of us a lot of money.

Some of the world’s largest oil traders including Vitol Group, Morgan Stanley and Royal Dutch Shell Plc (RDSA) are asking a judge to stop the disclosure of millions of records gathered by the top U.S. commodity regulator during its nationwide investigation of the crude markets.

The haul includes e-mails, depositions, trading records and audio files obtained by the U.S. Commodity Futures Trading Commission since its probe of the oil market began in December 2007. The companies appealed an Oct. 25 order by U.S. District Judge William H. Pauley that would allow the handover of the trove to lawyers leading a civil case alleging market manipulation by firms controlled by Norwegian billionaire John Fredriksen. The U.S. Court of Appeals in New York today ordered a temporary stay halting the release of the records while it considers speeding up review of the challenge.
The battle over the records reveals for the first time the breadth of the CFTC’s investigation. The agency told Pauley in August that 5.7 million documents and almost 200,000 audio files had been sent to the defendants in the manipulation case. Many of the files came from the national probe.
“Society needs more inspection of trading in the crude oil markets, not less,” said Chris Lovell, an attorney with Lovell Stewart Halebian Jacobson LLP in New York, who is leading the case and seeking class action status on behalf of traders who claim to have lost money because of alleged manipulation. “These guys should be subject to more transparency. I think we’d all be better off.”

‘Highly Confidential’

Pauley’s Oct. 25 order sharply restricts access to materials from the CFTC cache that the companies claim are “highly confidential.” Circulation of the documents will be limited, and Lovell and other attorneys involved in the civil case will have to sign declarations promising to comply with the confidentiality provisions. Use of the files for any other business purpose, such as trading strategies or unrelated lawsuits, is forbidden.
The case stems from the CFTC’s 2011 claims against Nick Wildgoose and James Dyer, traders at Fredriksen affiliates Parnon Energy Inc. in Houston and Arcadia Petroleum Ltd. in London. They are accused of manipulating the oil market in 2008 as prices rocketed toward $147 a barrel. The defendants have denied the allegations. Some of the companies whose records were disclosed to Parnon earlier this year weren’t notified until after the files were sent, court records show.
“We believe the CFTC may have improperly disclosed certain records,” said Brad Leone, a spokesman for Plains All American Pipeline LP (PAA), one of the companies appealing Pauley’s order.

Trading Fraternity

The dispute is the latest blow for a trading fraternity that has long prized secrecy.
In May, the European Commission raided the offices of Shell, BP Plc and Statoil ASA along with price reporting company Platts as part of a probe into how benchmark energy prices are set. The commission hasn’t charged any of the companies with wrongdoing. Last month, four longtime traders on the New York Mercantile Exchange filed a lawsuit claiming they can prove that BP, Statoil and Shell conspired with other firms, including Morgan Stanley and Vitol, to manipulate Brent crude, a benchmark used to price more than half the world’s oil.
Shell, Morgan Stanley (MS), Vitol, Plains and Castleton Commodities International LLC have appealed Pauley’s order. Spokesmen for Vitol, Shell and Morgan Stanley declined to comment; an attorney for Castleton didn’t return calls and an e-mail seeking comment.

‘Public Interest’

“These documents obviously have public interest value,” said Michael Greenberger, a former director of trading and markets at the CFTC and a law professor at the University of Maryland. “Within the CFTC papers, there may be evidence of manipulation of the market that has not been acted upon aggressively by the CFTC.”
Despite the confidentiality restrictions and the CFTC’s redactions, the files have already put lawyers for Wildgoose and Dyer “tantalizingly close” to identifying a confidential informant whose tip led to the charges, Jonathan P. Robell, a CFTC attorney, said during an Aug. 29 hearing.
At least one informant told the CFTC about Parnon’s trading “and essentially said there’s something rotten, if not in Denmark, in Cushing, Oklahoma,” Pauley said at an Aug. 2 hearing.
Parnon’s lawyers used the CFTC records to find and subpoena the informant’s attorney and identify the company the whistle-blower worked for, court records show. Documents including the identity of the informant’s attorney were sealed by the court.

WTI Manipulation

The CFTC in May 2011 accused Parnon of manipulating prices of West Texas Intermediate crude available at Cushing, the delivery point for the U.S. benchmark Nymex futures.
Parnon and its affiliates, subsidiaries of Fredriksen’s Cyprus-based Farahead Holdings Ltd., bought up a large share of WTI, then exploited its dominant position to create a perception that supplies were scarce in January 2008 and again March 2008, the CFTC said. That drove prices higher, allowing them to make money on a sizable derivatives bet, the CFTC said.
Wildgoose and Dyer then dumped their supplies, sending oil into a tailspin while profiting on derivatives that rose in value as prices fell, the CFTC said. The abrupt selloff cost the firm $15 million, which was more than offset by a $50 million gain on their paper positions.
Attorneys representing the defendants declined to comment.

Viking King

Fredriksen, a shipping magnate known within the industry as “The Viking King,” said in May 2011 that the CFTC’s lawsuit was “rubbish.”
“This came as a surprise to me, I wasn’t aware of it,” Fredriksen said in an interview outside Oslo at the time. “Those who work with buying and selling oil, that’s how they operate all of them. It’s completely normal.”
Plains told the court that the company provided more than 1 million pages to the CFTC, including transcripts of confidential depositions of Plains employees. Court records show the CFTC in 2010 deposed John von Berg, a senior vice president with Plains, and Hugo Zagaria, a director with the company.
Plains provided its records to the CFTC “in response to an unsolicited subpoena associated with a proceeding for which Plains was not a target,” Leone said.
Parnon has also subpoenaed Zagaria and von Berg, and Plains tried to quash the subpoena, court records show. The company also asked Parnon to provide declarations saying Zagaria and von Berg hadn’t participated in any manipulation with the defendants, according to an Oct. 11 e-mail from Elizabeth Bradshaw, an attorney at Winston & Strawn LLP representing Parnon.

Plains Strategies

“Plains’s documents, even though several years old, provide a road map for Plains’s business strategies,” the company said in its Nov. 13 request that the U.S. Court of Appeals stay Pauley’s order. “They demonstrate how Plains makes pricing decisions, its profit margins, and its hedging and risk-management strategies.”
Shell said the records the company turned over to the CFTC included details of its “refining operations, pipeline capacity, storage capacity and trading of crude oil,” court records show

Morgan Stanley gave the CFTC “detailed and highly confidential records pertaining to its commodity trading business,” according to a June court filing. The records, if released, “would potentially reveal strategies employed by Morgan Stanley traders.”
Vitol gave 1.4 million pages to the CFTC between 2008 and 2010 pursuant to requests from the agency and “in response to investigative subpoenas.”
“We’ve argued to the court that the deliverable supply and how the crude oil markets work and the communication among those trading in the market, are all pertinent to the case,” Lovell said.
U.S. oil stockpiles expanded last week by 375,000 barrels to 388.5 million, the Energy Information Administration said today. Supplies at Cushing climbed to 39.9 million.
The case is In Re: Crude Oil Commodity Futures Litigation, 11-cv-03600. The CFTC case is U.S. Commodity Futures Trading Commission v. Parnon Energy Inc., 11-cv-3543, U.S. District Court, Southern District of New York (Manhattan). The appeal is U.S. Commodity Futures Trading Commission v. Parnon Energy Inc., 13-04206, Second U.S. Circuit Court of Appeals (Manhattan).

To contact the reporters on this story: Asjylyn Loder in New York at; Bradley Olson in Houston at

Friday, November 15, 2013

The Official Report by the Waterfront Commission of New York Harbor

The Waterfront Commission of New York/New Jersey posted on their web-site the official report submitted to the Governors of New Jersey and New York.  This report was issued in March 2012, but references public hearings conducted in 2010.   Not sure what took them so long to issue the report.  The wheels of government turn slowly.

Click here for link to complete report.

Below is how it starts...
To the Honorable Chris Christie, Governor, and the Legislature of the State of New Jersey
and To the Honorable Andrew M. Cuomo, Governor,and Legislature of the State of New York: 
Between October 14, 2010 and December 2, 2010, the Waterfront Commission of New
York Harbor (“Commission”) conducted public hearings concerning unfair employment 
practices within the Port of New York District )"the Port", or "the Port of New York-New Jersey")
The hearings demonstrated and publicized that certain hiring practices, achieved
primarily through calculated provisions of collective bargaining agreements, illogical
interpretations of other provisions, and claims of “custom and practice,” have created within the
Port no/low-work, no/low-show positions generally characterized by outsized salaries. The
privileged few that are given those jobs are overwhelmingly connected to organized crime
figures or union leadership.

Not much has changed since the early days.  The Waterfront Commission is trying.  We shall see.

Thursday, November 14, 2013

Continued Downturn Affects Korean Shipping Companies

I remember after the economic collapse, many shipping companies thought it was the right time
to invest.  Cheap ships, cheap money. Just wait it out, things will improve.

It's not that easy.  Prime example of the long, long, business cycles of the shipping business.

From Bloomberg News.

Korean Shipping Lines Face Cash Crunch After Expansion

South Korea’s three biggest shipping companies face a cash crunch as 3 trillion won ($2.8 billion) of bonds are due for repayment in the next two years amid mounting losses from a global slump in rates to carry cargo.
Hanjin Shipping Co. (117930), Hyundai Merchant Marine Co. (011200) and STX Pan Ocean Co. (028670) are all forecast to post losses in 2013 for a third consecutive year, further denting the combined 1.3 trillion won of cash and near cash items they had as of the end of September. The companies need to repay 1.4 trillion won of bonds next year and 1.6 trillion won the year after.
A debt-fueled expansion after the 2008 Lehman Brothers Holdings Inc. bankruptcy filing pushed the carriers into losses so deep they may need financial assistance to repay loans taken to buy new vessels, said Kim Ik Sang, a credit analyst at HI Investment & Securities Co. As China’s economy cools and weak consumer spending persists in the U.S. and Europe, the companies are unlikely to turn around to improve their ability to repay loans, said Um Kyung A, an analyst at Shinyoung Securities Co.
“It’s pretty much out of their control,” said Seoul-based Um. “Cash is depleting quite fast while the shipping industry isn’t showing any signs of a recovery. I don’t think we can completely forgo the possibility of things turning worse next year.”
Hanjin, South Korea’s largest shipping company, and Hyundai Merchant are expected to post losses next year as well, according to analyst estimates compiled by Bloomberg. STX, the largest commodity-mover and under court receivership since June, may post its first profit in four years in 2014.

Wider Losses

The three shipping lines widened their losses in the third quarter from a year earlier because of an increase in interest payments while demand to move cargo remained weak, according to separate statements filed by the companies today.
Shares of Hanjin Shipping dropped 1.3 percent to close at 6,990 won in Seoul. STX Pan Ocean fell 3.9 percent to 1,115 won. Hyundai Merchant advanced 2.3 percent after it teamed up with Posco and Korea Railroad Corp. to develop a rail project linking Khasan on Russian border and North Korean port of Rajin.
Hanjin Shipping’s Chief Executive Officer Kim Young Min resigned Nov. 11 to take responsibility for the company’s losses and a delay in receiving financing from creditors. The company has 1.1 trillion won of bonds due in the next two years, compared with cash and near-cash items of 382 billion won at the end of September.

Perpetual Bonds

Hanjin has been selling assets and has sufficient cash for payments, said Kim Young Tae, a spokesman at the shipping company. The carrier will continue to look at financing options, including a perpetual bond sale, he said.
Hyundai Merchant has 1 trillion won to pay in the same two years, compared with 678 billion won in cash. STX owes 900 billion won with a cash pile of 237 billion won in that period, according to data compiled by Bloomberg. STX is in talks with its main creditors on maturing debt, according to an e-mailed response to Bloomberg News.
Hyundai Merchant has secured funds to meet payments until the first half of next year, said Lee Jun Ki, a spokesman. Hyundai will look at “various options,” if the shipping industry doesn’t improve, he said.
“The amount coming due may not seem big, but it’s a problem if you have a similar size of loan maturing for three straight years and you are not making enough money,” said HI Investment’s Kim. “Of all the industries, shipping is having the biggest problems because of the liquidity issues they face.”

Temporary Plan

The government holds one of the keys to easing the debt crisis for companies through its Korea Development Bank.
To help troubled shippers and other companies pay down the bonds, the government in July put forward a temporary plan in which KDB will help raise 80 percent of funds needed for repayment. The companies need to bring the rest. That enabled Hyundai Merchant refinance 280 billion won of maturing bonds last month.
“We prepared corporate bond market stabilization steps in July preemptively,” Shin Je Yoon, chairman of South Korea’s regulator Financial Services Commission, said Oct. 24. “I don’t have immediate concerns about the debt market, but we can review easing the July measure to provide help to a broader range of companies if needed.”

KDB’s Role

KDB declined to comment, it said in an e-mail response.
The state-owned bank has played a key role in helping distressed companies restructure in the past. It’s taking the lead role in rescheduling debt for STX Offshore (067250) & Shipbuilding Co. and one of its funds became the biggest shareholder of Daewoo Engineering & Construction Co. (047040) by swapping debt for equity.
“KDB is very important,” HI Investment’s Kim said. “If not for them, the circumstances in the shipping industry could be far worse than what they are now.”
Hanjin, which has reported a loss in each of the past 10 quarters, got a loan from affiliate Korean Air Lines Co. (003490) in October while Hyundai Merchant sold shares this month.
Hanjin is considering selling stakes in port terminals, it said in a regulatory filing Nov. 12.

A glut of vessels has contributed to the slump in the Baltic Dry Index. (BDIY) The most popular global measure of commodity-shipping rates plunged 90 percent from its peak to a record low of 647 in February last year. The gauge has since more than doubled.
Spot rates to haul container cargo from Asia to Europe, the world’s busiest trading lane, have dropped 12 percent from this year’s high, according to the Shanghai Shipping Exchange.

Two Victims

The global downturn has already claimed two victims in Japan. Last year, Sanko Steamship Co., a Japanese operator of 185 ships, went into bankruptcy protection after failing to reach agreement with creditors on an out-of-court turnaround.
Daiichi Chuo Kisen Kaisha, based in Tokyo, received a bailout from its lead shareholder Mitsui O.S.K. Lines Ltd. earlier this year.
Unlike Denmark’s A.P. Moeller-Maersk A/S, operator of the world’s largest sea box carrier, and Hong Kong-based Orient Overseas (316) (International) Ltd., South Korean shipping lines have been burdened by higher financing costs since the 1997-1998 Asian financial crisis, according to Shinyoung’s Um.

 The Korean shipping lines had the worst timing for investment,” Um said. “While their competitors were able to order ships when prices were low, Korean companies ended up buying at a high.”
While the global container cargo market and commodity shipping rates have improved, South Korean shipping companies will still be at a disadvantage, said Kang Seong Jin, an analyst at Tongyang Securities Inc. in Seoul.
“Koreans are losing competitiveness,” he said. “While the bigger players have been investing to grow their economy of scale, Koreans have been busy trying to repay debt.”
To contact the reporter on this story: Kyunghee Park in Singapore at
To contact the editor responsible for this story: Anand Krishnamoorthy at

Sunday, November 10, 2013

Hanjin Shipping CEO Resigns

From Bloomberg News

Hanjin Shipping Co. (117930)’s Chief Executive Officer Kim Young Min resigned, taking responsibility for two successive years of losses at South Korea’s largest shipper and a delay in getting financial support from creditors.
Kim, 58, will stay until a replacement is found, the Seoul-based company said in an e-mailed statement today. Kim was appointed as CEO in January 2009 after 20 years with Citigroup Inc. Hanjin posted a loss in each of the past 10 quarters.

Shares of the container-to-commodity shipper, which last month received a loan from its group affiliate Korean Air Lines Co. to ease a “temporary” liquidity shortage, fell in Seoul trading. Laden with debt, Hanjin is among liners trying to overcome a global overcapacity and a slump in shipping rates, factors that pushed rival STX Pan Ocean Co. to file for a court receivership in June. 

“There’s no good news for Hanjin right now,” said Yun Hee Do, an analyst at Korea Investment & Securities Co. in Seoul. “The company hasn’t been able to make money recently and its interest payment has been increasing. There’s quite a sizable amount of debt coming due next year for Hanjin.”

Korean Air said last month it will provide 150 billion won ($142 million) to Hanjin to help ease the company’s liquidity shortage. The shipping line has 736.4 billion won of debt and loans maturing next year, compared with 58 billion won in 2013, according to data compiled by Bloomberg. Its cash and cash equivalent was 506.6 billion won at the end of June.
Korean Air, the nation’s biggest airline, is the largest shareholder of Hanjin’s parent Hanjin Shipping Holdings Co. They are both part of Hanjin Group.
Hanjin fell as much as 1.4 percent to 7,000 won before trading at 7,060 won as of 11:32 in Seoul. The stock was up by much as 3 percent earlier today. Hanjin has slumped 41 percent this year, compared with a 0.6 percent decline in the benchmark Kospi index.
Hanjin Shipping narrowed losses to 121.8 billion won in the first half, from 346.6 billion won loss a year earlier.
To contact the reporter on this story: Kyunghee Park in Singapore at

 It's not good news for most shipping companies these days.  Will still be a tough few years, and still waiting to see if more consolidation in the industry.

Saturday, November 9, 2013

OSX Brasil S A will file for bankruptcy protection

The "boom" has gone "bust" in Brasil.   This from Reuters.

By Sabrina Lorenzi

Nov 8 (Reuters) - Brazilian shipbuilder OSX Brasil SA said on Friday it will file for bankruptcy protection, another step in the decline of former billionaire Eike Batista's empire.
The company said in a securities filing its shareholders approved the bankruptcy filing, which is expected to take place next week in a Rio de Janeiro court. The company also announced the ouster of Chief Executive Marcelo Gomes.
OSX has 5.34 billion reais ($2.29 billion) in debt and could seek to restructure part or all of that, becoming the second company of Batista's to file for bankruptcy. Batista's oil producer company, OGX Petróleo e Gas Participações SA , sought protection from creditors on Oct. 30.
The OGX petition, citing 11.2 billion reais in debt, was the largest corporate bankruptcy filing in Latin America.

The OSX bankruptcy decision follows more than a year during which Batista's EBX Group - a sprawling empire of energy, minerals and logistics companies, including OGX and OSX - collapsed under a mountain of debt after missing production targets.
EBX was once valued at more than $60 billion, and Batista was a swaggering symbol of Brazil's rise as an emerging-market powerhouse over the past decade.
Yet, as problems mounted, they fulfilled predictions made by skeptics of Batista's breakneck expansion in recent years. Critics warned that interdependence between EBX companies would make them vulnerable to each other's problems, the opposite of Batista's contention that the links would generate business helping the companies flourish.
Once OGX filed for court protection, an OSX filing became more likely and thus did not come as a surprise. The shipbuilder depends on its sister company, to which it leases oil production vessels, for all its revenue.
OSX depends on OGX, to which it leases oil production ships, for all its revenue. OSX is 10 percent owned by South Korea's Hyundai Heavy Industry.
Parent company OSX and two subsidiaries OSX Construção Naval S.A. and OSX Serviços Operacionais Ltda. will jointly file for protection from creditors, the filing said.
The company did not mention a third unit, OSX Leasing, which owns three platforms that are leased for oil exploration purposes. OSX's $500 million in secured dollar-denominated bonds have rallied in recent days on speculation that OSX Brasil would keep OSX Leasing off the filing so that the company can freely decide what to do with the leasing company's assets.

If the court approves the bankruptcy request OSX plans to file, the company will have 60 days to present a restructuring plan. OSX creditors will then have 30 days to endorse or reject the plan, though legal experts warn the proceedings could drag on for much longer than that.
Brazilian Development Bank BNDES said in a statement that it granted OSX a $228 million bridge loan, but added that the loan is backed by bank guarantees and presents no risk to the BNDES.

OSX, whose assets include an unfinished shipyard on the northern coast of Rio de Janeiro state, is also one of OGX's biggest creditors. OGX owes OSX at least 2.45 billion reais, according to documents filed with the bankruptcy court.

Before the OGX and OSX filings, Batista had already agreed to sell stakes and assets of the other four publicly traded companies in the ailing EBX conglomerate.

Like other Batista companies, OSX's troubles stem from the failure of OGX to meet any of its ambitious oil production targets. After starting output at its first field in early 2012, OGX repeatedly missed goals despite reassuring investors that copious amounts of oil would soon flow.

Having once said OGX would produce 1.4 million barrels of oil and natural gas equivalent a day by 2018, or more than half Brazil's current output, the company never produced more than 1 percent of that.
According to Batista's plan, the oil was supposed to have provided tens of billions of dollars to build several dozen oil platforms and other vessels at the OSX shipyard. The facility was modeled on shipyards operated by Hyundai Heavy Industry and was designed to be the largest shipyard in the Southern Hemisphere.
Bankruptcy protection could help OSX salvage its shipyard unit, part of which is almost ready to begin operations at the port of Açu complex on the Rio de Janeiro coast.

 The port's operator LLX Logística SA, another company founded by Batista, has agreed to renegotiate its contracts with OSX for the use of the port, reducing OSX's investment obligations, Friday's filing said.

Thursday, November 7, 2013

Waterfront Commission - continues to "clean house"

The Waterfront Commission is finally doing it's job.   Here's another one they are throwing out.

Pier Superintendent’s License Revoked for Refusal to Take Commission Ordered Drug Tests
November 5, 2013
           Red Hook Container Terminal Probationary Pier Superintendent Thomas Griffith’s license has been revoked for refusing to take Commission ordered urine and hair tests for drug use. At the time he was ordered to take the tests, Griffith was advised that failure to appear for the tests would be considered a positive result and could result in the revocation of his license.
           Griffith had previously been denied a Pier Superintendent’s license in 2008 after it was found that he lacked the required good character and integrity because of prior drug use and false testimony about his drug use. On application of Red Hook Container Terminal dated April 27, 2012, Griffith was issued a temporary, probationary license. Before permanent licensure, Griffith was ordered by the Commission to be tested for illegal drug usage. Griffith failed to appear for the tests.
           After a hearing on the charges, an Administrative Law Judge found that Griffith failed to provide material evidence as required by the Commission (the drug tests) and lacked the requisite good character and integrity required of a Pier Superintendent citing his “historical penchant for fabrication by evasion” regarding his drug use. The Administrative Law Judge recommended that Griffith’s temporary license be revoked and his application for a permanent license be denied. The Commission concurred with the Administrative Law Judge’s findings and revoked his temporary license and denied his application for a permanent license.

ILA's complaint about Waterfront Commission not considered valid

The Port Authority of New York and New Jersey says the Waterfront Commission is not
delaying the hiring of new employees.

This from their web-site


Date: Nov 07, 2013
Press Release Number: 112-2013
"As the agency that oversees the largest port complex on the East Coast, our goal is simple: To continue to build on the 280,000 jobs and billions of dollars in economic activity that the Port of New York and New Jersey provides to the region. This week, we had a productive meeting with the Waterfront Commission and the New York Shipping Association over hiring at the port at a time when there is a real need for additional employees on the docks. All parties made a great deal of progress, which when effected, will result in the hiring of hundreds of ILA members in the short term. Though work needs to be done to finalize the agreement, we are optimistic as we continue to work with both parties towards a settlement. All parties agree that the Waterfront Commission was and is not delaying hiring, and applicants are actively being referred and processed. All stakeholders continue to work in a cooperative fashion to put people to work as quickly possible."

Port Authority of New York and New Jersey

Wednesday, November 6, 2013

COSCO Expects to be profitable for 2013

COSCO is the first (well, in recent history) shipping company established in China.  They were established in 1961.  Click here for their web-site and history.

Before all the changes in China, I doubt if anyone knew if Cosco made a profit or a loss.  Their costs were so cheap, and they existed for the country to obtain foreign money, and as a way to get products to and from their country.

My how times have changed.  Even though China is still a "communist" country, the almighty profit and loss has certainly come into being.

This from the Journal of Commerce

The chairman of Cosco Group expressed confidence on Wednesday that the company would achieve its financial goals for 2013, signaling the company is aiming to achieve a full-year profit and avoid delisting from the Shanghai Stock Exchange.
“We are confident that we will achieve the goal we planned at the beginning of the year,” Ma Zehua told the JOC at the opening of the annual Cosco-hosted World Shipping (China) Summit in Ningbo.
As Cosco had reported losses in 2011 and 2012 due to weakness in shipping markets, a full year-loss would have resulted in automatic delisting from the Shanghai exchange. That would have been a huge comedown for a prominent state-owned enterprise and one that has helped spearhead China’s entry into foreign markets since its founding in 1961.
China Cosco Holdings has sold several assets this year to  its state-run parent China Ocean Shipping (Group) Co., or Cosco Group, in a bid to avoid full-year losses. China Cosco Holdings, the container line’s parent company, cut its first half loss to $162 million from $796 million in the first half of 2012 through asset sales.
In March, it sold its logistics business to Cosco Group for $1.1 billion. In May, the company's listed port operating unit, Cosco Pacific Ltd., sold its stake in a container manufacturer to Cosco Group for $1.22 billion. In August, it sold holdings in two office properties, one in Shanghai and another in Qingdao, to the parent company for US$609 million. It also sold stakes in Cosco Plaza in Shanghai and Sunshine Plaza in Qingdao.
Ma took over the chairman role at Cosco Group in July following the retirement of Capt. Wei Jiafu.
The World Shipping (China) Summit is officially co-organized by Cosco, Drewry, JOC Group and Maritime China magazine.