Tuesday, December 31, 2013

Reporting the price of oil

The Financial Times has a great article about how the price of oil is determined.

However, after it became known the Libor interest rate was being manipulated by
the banks, now everyone is wondering if the same thing has been going on
with oil prices.

Apparently there is a a small organization called Platts (part of McGraw-Hill) which monitors bids
and offers for oil products.

click here for link to article

Monday, December 30, 2013

Why is the WTI oil price so high?

Gas prices here jumped 10 cents in one day last week.   Of course it was the day I decided to
fill up the gas tank.  Luckily I drive a very small car.

This once again made me wonder, "why are oil prices so high".   

As I posted previously, I thought the oil prices were being rigged, and the government thought so also.
However, perhaps the oil traders were successful in their bid to stop disclosure of records...
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.

Which, of course, would allow them to cover their tracks, and start a different scheme to
manipulate the price of oil.

There is a very good article in FOREX NEWS questioning the rational of the increase in the
click here for link

Fundamentally, the case for continued bullish push for WTI Crude remains weak. Global economic recovery may have improved, but production levels are far from pre financial crisis levels. Even after taking inflation into account, price should not be anywhere near the 100 USD per barrel level – where Oil was at before the crisis. Furthermore, oil production levels in US are hitting record highs after record highs, and current bout of decreasing inventory may simply be a short-term reprieve, with inventory expecting to build up strongly once again in 2014. - See more at: http://www.forexnews.com/blog/2013/12/30/wti-crude-current-bull-run-may-last/#sthash.kA7WX1XO.dpuf

Fundamentally, the case for continued bullish push for WTI Crude remains weak. Global economic recovery may have improved, but production levels are far from pre financial crisis levels. Even after taking inflation into account, price should not be anywhere near the 100 USD per barrel level – where Oil was at before the crisis. Furthermore, oil production levels in US are hitting record highs after record highs, and current bout of decreasing inventory may simply be a short-term reprieve, with inventory expecting to build up strongly once again in 2014. - See more at: http://www.forexnews.com/blog/2013/12/30/wti-crude-current-bull-run-may-last/#sthash.kA7WX1XO.dpuf

MSC Monterey has severe crack in hull

The MSC Monterey, which was named in 2007,  experienced a crack in the main deck,
which then spread to the outer hull. The article says it was named in 2007, but built in
2008, so I don't really know how old it is, but it's not THAT old.

The vessel was built in Romania.  It is now south of Newfoundland, and plans are
to make temporary repairs and go to Boston.

If I were a ship operator, would certainly start checking the steel integrity of any ship built in Romania.

click here for link to article  at Maritime Matters

Friday, December 27, 2013

Hapag Lloyd courts (or threatens) Hamburg Sud

I doubt this will  happen...but one can always ask. 

(Reuters) - The chairman of German shipping group Hapag-Lloyd HPLG.UL said rival Hamburg-Sued should join merger talks between Hapag-Lloyd and Chile's Vapores VAP.SN.
"The three of us together would be stronger," Hamburger Abendblatt quoted Juergen Weber as saying in an excerpt from an article to be published on Friday.
Hapag-Lloyd, the world's No.5 container shipping company by capacity, earlier this month said it was in talks to merge with smaller Chilean shipper Compania Sud Americana de Vapores, adding that no agreement had yet been reached.
Shipping groups have been struggling through the worst slump on record, with the weak global economy, oversupply of vessels and low freight rates highlighting the benefits of consolidation in the sector.
Hapag-Lloyd, burdened by 2.35 billion euros ($3.2 billion) of net debt and a nine-month net loss of 56 million euros, already held talks with Hamburg-Sued last year, but the parties were unable to agree terms.

The deal would have created the world's No. 4 player behind Maersk Line, part of Danish conglomerate A.P. Moller-Maersk (MAERSKb.CO), Switzerland's Mediterranean Shipping Company and France's CMA CGM CMACG.UL.
Weber told Hamburger Abendblatt that he hoped Hapag-Lloyd's talks with Vapores would be a "warning and motivation" for Hamburg Sued's owner, the Oetker family, to rekindle talks.
He also said the owners of Hapag-Lloyd still aimed to float shares in the German shipping company in an initial public offering, though that was "hardly possible" before the end of 2014, among other because a new chief executive is due to take the helm next year.
Officials for Hamburg-Sued were not immediately available for comment.
The city of Hamburg holds 36.9 percent of Hapag-Lloyd, while Klaus Michael Kuehne, who also controls Swiss logistics group Kuehne & Nagel (KNIN.VX), owns 28.2 percent. German travel group TUI AG (TUIGn.DE) owns a 22 percent stake.
(Reporting by Maria Sheahan; editing by Andrew Hay)

Tuesday, December 24, 2013

FMC fines NYK and K-Line

The FMC has fined  K-Line and NYK.  The press release says they violated 46 U.S.C.  41102 listed below.

My best guess is they were buying space from each other without having a space agreement on file at the FMC, and they were not charging each other as per the tariff.   

I recall carriers doing this, thinking there was nothing wrong.  It didn't use to be difficult to file these type of agreements (perhaps it is now).  Not knowing, or caring, about U.S. law cost each of these carriers over 1 USD million a piece.

Maybe that's not much money to them.

click here for press release (also quoted below)

Here's the section of the law they violated.

§41102. General prohibitions

(a) Obtaining Transportation at Less Than Applicable Rates.—A person may not knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or any other unjust or unfair device or means, obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise apply.
(b) Operating Contrary to Agreement.—A person may not operate under an agreement required to be filed under section 40302 or 40305 of this title if—
(1) the agreement has not become effective under section 40304 of this title or has been rejected, disapproved, or canceled; or
(2) the operation is not in accordance with the terms of the agreement or any modifications to the agreement made by the Federal Maritime Commission.

(c) Practices in Handling Property.—A common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.
And here's the press release from the FMC

December 23, 2013

NR 13-19

Contact: Karen V. Gregory, Secretary (202) 523-5725
The Federal Maritime Commission announced compromise agreements reached with two common carriers operating pure car carriers (PCCs) and roll on/roll off (RO/RO) vessels in U.S. inbound and outbound trades. Under these separate agreements, Kawasaki Kisen Kaisha Ltd. (K Line), paid $1,100,000 in civil penalties and Nippon Yusen Kaisha (NYK Line), paid $1,225,000 in penalties. Both carriers are headquartered in Tokyo, Japan, and operate diverse fleets trading in the U.S.-foreign trades and globally.
The compromise agreements resolved allegations that K Line and NYK Line violated provisions of the Shipping Act, including section 10(a) of the Shipping Act, 46 U.S.C. § 41102(b), by acting in concert with other ocean common carriers with respect to the shipment of automobiles and other motorized vehicles by RO/RO or specialized car carrier vessels, where such agreement(s) had not been filed with the Commission or become effective under the Shipping Act. The compromise agreements also addressed related activities and violations. Commission staff alleged that these practices persisted over a period of several years and involved numerous U.S. trade lanes, including from and/or to the Far East, Europe, the Middle East and South America.
Chairman Mario Cordero stated: "These penalties underscore the seriousness with which the Commission views the carriers’ obligation to file with the Commission any agreement with other carriers affecting working relationships in the U.S. trades, both for import and export traffic. The shipping public has a right to know the subject matter and scope of any such agreement, and the Commission is charged by Congress to oversee the parties’ operations and conduct under such agreements. Investigations by our Bureau of Enforcement as to additional carriers implicated in similar agreement activities are continuing at this time."
In concluding the compromise agreements, K Line and NYK Line agreed to provide ongoing cooperation with other Commission investigations or enforcement actions with respect to these types of activities. The carriers did not admit to violations of the Act or the Commission’s regulations. Staff attorneys with the Commission’s Bureau of Enforcement negotiated the compromise agreements.
The Federal Maritime Commission (FMC) is the independent federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.

Thursday, December 19, 2013

Waterfront Commission is busy

Finally, after 70 years, the Waterfront Commission is doing their job.

Every day there is a new press release.  After all these arrests, there will surely be
lots of openings for ILA jobs.

This is the latest

Click here for link

DA Dan Donovan announces the takedown of an insurance fraud ring involving medical professionals and longshoreman
December 18, 2013
           STATEN ISLAND, NY – Richmond County District Attorney Daniel M. Donovan, Jr., New York City Police Commissioner Raymond W. Kelly, Commissioner Ronald Goldstock of the Waterfront Commission of New York Harbor, Special Agent in Charge Brian Crowell of the U.S. Drug Enforcement Administration’s New York Division (DEA), Chairman Robert Beloten of the New York State Workers’ Compensation Board and Superintendent Benjamin M. Lawsky of the New York State Department of Financial Services announced today the arrests and indictments of nine individuals after a 20-month investigation into insurance fraud, the fraudulent dispensing of prescriptions for controlled substances, sale and possession of oxycodone and gambling.
           Targets of the investigation, dubbed “Operation Shore Thing,” include MIHIR BHATT, a pain management doctor; THOMAS E. DINARDO, a chiropractor; STEVEN ALCARAS, NICHOLAS TORNABENE, ROSARIO SAVASTANO and CHRISTOPHER GALASSO, all longshoreman; CHARLES TORNABENE, a laborer, and RITA PATEL, a pharmacist. The investigation also yielded the arrest and indictment of longshoreman JOSEPH FAVUZZA, a known associate of the Colombo crime family who was running an organized gambling operation which involved an Internet gambling site.
           “My father worked as a longshoreman, so I grew up knowing the dangers of the job. I can’t imagine how those risks are multiplied when people show up to work high on narcotics. But that is exactly what happened here, longshoremen abusing painkillers prescribed to them by a pill peddling doctor and a crooked chiropractor who conspired to rip off millions from insurance companies in a complex fraud scam. The number of oxycodone pills prescribed by the doctor in this case is a staggering 1,775,703 over four years, enough to cover 7 miles if you placed pill in front of pill. That distance would stretch from Howland Hook to the foot of my office,” said Richmond County District Attorney Daniel M. Donovan, Jr. “This case is a clear example of why we need a national drug database in this country, so that we can track the pill activity in other states and know when our borough is being inundated with over-prescribed painkillers. The one sure result of Operation Shore Thing is that dangerous amounts of oxycodone are no longer illegally flowing through Staten Island. I also want to note that I have the highest regard for the workers who are proud to call themselves longshoremen, and the defendants in this case are an exception to that noble profession.”
           NYPD Commissioner Raymond W. Kelly said, “This case is another example of criminals perpetuating and exploiting addiction, at great risk to the public’s safety. It is especially despicable when licensed medical practitioners put profit over others’ welfare. I commend the members of the NYPD’s Organized Crime Investigations Division for their work in bringing the principals of this prescription drug and insurance fraud ring to justice.”
           Commissioner Ronald Goldstock of The Waterfront Commission of New York Harbor stated, “The Port is a dangerous place in which to work; those who we register deserve to be protected from co-workers who make decisions and operate machinery under the influence of narcotics and opioids. We will continue to use our investigative, administrative and drug testing authority to remove drug dealers and users from the docks. These arrests and our administrative revocations make even more disturbing the New York Shipping Association and I.L.A.’s unsuccessful attempts to curb the Commission’s enforcement actions regarding drug testing in the Port.”
           DEA Special Agent in Charge Brian R. Crowell said, “We allege Dr. Bhatt was a pain pill trafficker who wrote over 11,692 prescriptions for Oxycodone products over a two year period, and through his illegal activities, Dr. Bhatt netted illicit proceeds in excess of $12 million at the expense of the pain pill and heroin epidemic our communities face. More than 52 million Americans have abused prescription drugs at least once in their life. Visits by individuals to hospital emergency rooms involving the misuse or abuse of pharmaceutical drugs have doubled over the past five years and law enforcement remains vigilant in bringing to justice those drug traffickers responsible for fueling prescription drug abuse with no regard to public health. I commend the men and women from the NYPD, the Waterfront Commission of New York Harbor and the TDS-NY for their diligent investigation.”
           Chairman Robert Beloten of NYS Workers’ Compensation Board stated, “The Workers’ Compensation Board protects injured workers against doctors who overprescribe, who don’t provide the treatment they’re billing for, and who keep their patients in the system not for health care but to line their own pockets. People hurt at work deserve the best health care possible, so we’ll continue fighting health care fraud at all levels with all law enforcement agencies to ensure the integrity of the system.”
           Benjamin M. Lawsky, Superintendent of the Financial Services, said: “As alleged, this criminal network reaped millions of dollars in illicit profits by trafficking in illegal drugs and engaging in insurance fraud and kickbacks. These arrests help put the brakes on that scheme. The Department of Financial Services thanks District Attorney Daniel M. Donovan, Jr. and all the law enforcement agencies which worked on this investigation.”
           “Operation Shore Thing” commenced in March 2012 and included the use of confidential sources, undercover police officers, electronic surveillance and physical surveillance. The scam was perpetrated by defendant BHATT, who engaged in stealing from insurance companies and fraudulently dispensing narcotic drugs under the guise of a pain management enterprise.
           Patients paid for the alleged pain management services by using their insurance and received prescriptions for oxycodone based upon perfunctory or nonexistent treatment rendered by BHATT at the NYC Wellness Center at 4870 Hylan Blvd., Staten Island, New York, which is owned and operated by DINARDO, and other locations. BHATT billed insurance companies using his own name and through his business, BMB Medical P.C.
           DINARDO would bring patients into his offices, the NYC Wellness Center, and then he and BHATT would direct them to make return office visits, receive chiropractic treatment, magnetic resonance images, nerve conduction tests, and electromyography (“EMGs”), to support a long term insurance billing scheme and the dispensing of oxycodone prescriptions.
           These exams, if done at all, were not conducted properly, and were conducted to give the appearance of an examination to justify further billable office visits, dispensing prescriptions for oxycodone, and lengthy workers compensation claims. Participating patients would call to get prescriptions for oxycodone and would receive them in return for billable office visits that did not occur, or which were perfunctory and lasted only an average 3-5 minutes. Insurance companies would then be billed for procedures that took 25, 40, or 60 minutes.
           BHATT and DINARDO decided which patients were too risky to see because of possible law enforcement surveillance and instructed members of the enterprise on how to avoid detection by law enforcement. DINARDO employed a lookout to surveil possible law enforcement activities in the vicinity of the NYC Wellness Center. He also flagged patients who presented a risk of exposing his criminal/fraudulent activities due to their age, reputation for talking too much, and likelihood of getting caught in illegal pill related activities. BHATT paid DINARDO monetary compensation, under the guise of rent, for providing the location and patients for the fraud.
           BHATT also dispensed prescriptions from his Lyle Place home in Edison, New Jersey, which was not a medical office, while indicating in insurance claims that the prescriptions were generated from office visits occurring in Staten Island. In addition to utilizing NYC Wellness Center, BHATT also perpetrated his fraudulent activities at medical offices located at 456 Arlene St. and 3733 Richmond Avenue in Staten Island, New York, and a location in Queens.
           As part of the conspiracy, BHATT billed Connecticut General Life Insurance (“Cigna”) and Empire Blue Cross Blue Shield for services that he did not provide. BHATT also issued prescriptions to ALCARAS, GALASSO, SAVASTANO, NICHOLAS TORNABENE and CHARLES TORNABENE that were paid for, in part, with CVS Caremark insurance.
           BHATT would direct patients to use PATEL, of the Shayona Pharmacy at 147 Smith St. in Perth Amboy, New Jersey, to fill their prescriptions. PATEL, in turn, directed BHATT to issue oxycodone prescriptions to patients based upon their insurance coverage so as to maximize the profit of the conspiracy. PATEL also instructed BHATT how to prescribe oxycodone to avoid detection by law enforcement. Further, PATEL would charge BHATT’s patients more than their insurance copayment to fill their oxycodone prescriptions, yielding herself an ill-gained profit.
           ALCARAS, a longshoreman, managed appointments and the picking up of prescriptions of oxycodone, for the other, separately indicted longshoremen, who received prescriptions for oxycodone without exams by BHATT or after perfunctory visits to his offices. ALCARAS communicated with both BHATT and DINARDO about the suitability for inclusion or exclusion of individual longshoreman as patients. ALCARAS also communicated with BHATT and DINARDO when longshoreman were needed at one of BHATT’s offices for fraudulent exams to justify further fraudulent billing of insurance companies, or to receive fraudulent doctor’s notes to avoid losing their registration as longshoreman.
           From on or about and between Feb. 26, 2013, and April 26, 2013, GALASSO filed false instruments with the Waterfront Commission in order to avoid decasualization, which is the process of removing longshoremen from the register based on failure to meet the work requirements. Specifically, ALCARAS and GALASSO requested doctor’s notes from BHATT and DINARDO for medical treatment of GALASSO that did not occur, and instructed them on how the notes should be written.
           In addition to participating in the insurance fraud, some of the longshoreman also evaded drug tests at work, learning about them beforehand and using devices like prosthetics, cleansing drinks and synthetic urine to try and pass the test. The investigation also uncovered that several of the longshoreman also went to work under the influence of narcotics. NICHOLAS TORNABENE also engaged in selling drugs.
           Recovered during the execution of search warrants were $3 million in assets, as well as 12 pounds of gold and a quantity of oxycodone.
            This case is being prosecuted by Assistant District Attorney Gabriel McKeen of the Richmond Country District Attorney’s Office, under the supervision of Assistant District Attorney Amy Legow, Chief of the Investigations Bureau. Also assisting in the prosecution is Assistant District Attorney David Frey, Deputy Chief of the Investigations Bureau.
           Participating agencies and investigators were:

• Detective Jeffrey Quod and members of the New York Police Department’s Organized Crime Investigation Division, Major Investigations Section team, acting under the supervision of Captain John Dusanenko and Lieutenant Jack Iacovou.

• Detective Ralph Grasso and members of Waterfront Commission New York Harbor Brooklyn Field Office, acting under the supervision of Capt. Jeffrey Heinssen. Also, attorney Jeffrey Kwastel of the Waterfront Commission, who was sworn in as a special ADA to assist in the investigation and indictment.

• Detective Lisa Paskewitz and members of the NYPD Asset Forfeiture Unit and the El Dorado Task Force from Immigrations and Customs Enforcement, acting under the supervision of Sgt. Gary Galitsky and Lieutenant Charles Scalzo. Detective Paskewitz also worked on the Asset Forfeiture Task Force for Homeland Security, acting under the supervision of Shawn Polonet, group supervisor for the Asset Forfeiture Unit, Homeland Security Investigations, New York.

• The DEA’s Tactical Diversion Squad which is comprised of agents and officers from the DEA, NYPD, Town of Orangetown, Westchester County Police Department, acting under the direction of DEA Supervisory Special Agent Special Agent in Charge Brian R. Crowell.

• Inspector General Paul D’Emilia of the New York State Workers’ Compensation Board. Part of the case was also handled by Pamela Davis and David Regazzi, Office of the Fraud Inspector General, New York State Workers’ Compensation Board.

• Senior Investigator Ed Miller and Deputy Chief Investigators Joe Edwards and Anthony Gonzalez of the New York State Department of Financial Services, under the overall supervision of Frauds Bureau Deputy Director Angelo Carbone, Director Frank Orlando and Executive Deputy Superintendent Joy Feigenbaum.

• Brendan Vallely from the Bureau of Narcotics Enforcement, New York State Department of Health
           Also, special thanks to AIG and Emblem Health insurance companies for their cooperation, as well as Cigna, Empire Blue Cross Blue Shield, Aetna and CVS Caremark.
           And, credit is to be given to the Middlesex County Prosecutor’s Office for assisting in the investigation.
           The charges contained in the indictments are merely allegations, and the defendants are presumed innocent until proven guilty. The defendants are facing various felony counts including enterprise corruption, scheme to defraud, grand larceny, insurance fraud, filing false business records and conspiracy. FAVUZZA is facing several gambling charges.
           Mihir Bhatt, 47 Medical Doctor 03/07/1966 22 Lyle Place, Edison, NJ Arrested 12/17/13 in New Jersey, awaiting extradition If convicted of the top charge, enterprise corruption, he faces a maximum of 25 years in prison.
           Thomas E. Dinardo, 44 Chiropractor 06/16/1969 3755 Amboy Road, SI NY Arrested and arraigned 12/17/13 Bail set at $90,000 If convicted of the top charge, enterprise corruption, he faces a maximum of 25 years in prison.
           Steven John Alcaras, 42 Longshoreman, assigned to the Brooklyn Cruise Terminal 06/24/1971 759 Katan Ave., SI NY Arrested and arraigned 12/17/13 Bail set at $77,500 If convicted of the top charge, enterprise corruption, he faces a maximum of 25 years in prison.
           Nicholas Tornabene, 28 Longshoreman, assigned to the New York Container Terminal at Howland Hook 08/01/1985 8217 16th Ave., Brooklyn NY Arrested and arraigned 12/17/13 Bail set at $25,000 If convicted of the top charge, criminal sale of a controlled substance in the 3rd degree, he faces a maximum of 9 years in prison.
           Charles Tornabene, 28 Laborer 08/01/1985 8217 16th Ave., Brooklyn NY Arrested and arraigned 12/17/13 Bail set at $15,000 If convicted of the top charge, insurance fraud, he faces a maximum of 7 years in prison.
            Rosario Savastano, 28 Longshoreman, assigned to the Brooklyn Cruise Terminal 02/27/1985 1777 West 12th St, Brooklyn NY Arrested and arraigned 12/17/13 Bail set at $15,000 If convicted of the top charge, insurance fraud, he faces a maximum of 7 years in prison.
           Christopher Galasso, 29 Longshoreman, assigned to the Brooklyn Cruise Terminal 06/07/1984 456 Fanning St., SI NY Arrested and arraigned 12/17/13 Bail set at $15,000 If convicted of the top charge, insurance fraud, he faces a maximum of 7 years in prison.
           Joseph Favuzza, 29 Longshoreman, assigned to the New York Container Terminal at Howland Hook (suspended since 2012 on separate cases) 10/23/1984 92 Fahy Ave., SI NY Arrested and arraigned 12/17/13 Bail set at $5,000 If convicted of the top charge, promoting gambling, he faces a maximum of 4 years in prison.
           Rita Patel, 48 Pharmacist 06/20/1965 4 Hauser Lane, Matawan NJ Arrested 12/17/13 in New Jersey, awaiting extradition If convicted of the top charge, criminal sale of a prescription for a controlled substance, she faces a maximum of 15 years in prison.

Monday, December 16, 2013

FBI Arrests Importers of Counterfeit Goods

Counterfeit goods have been available in Chinatown in NYC for a long time.  Even John Stewart makes jokes about it on his show.  Of course, someone must import these goods.

The FBI has made arrests in one operation of counterfeit imports, plus money laundering.

This is from the FBI web-site.  The FBI is really busy, and reading their press releases is
quite an eye opener.

click here for link to complete news release

Nine Admit Guilt in Largest Counterfeit Goods Conspiracy Ever Charged

U.S. Attorney’s Office December 13, 2013
  • District of New Jersey (973) 645-2888

NEWARK, NJ—Nine members of a massive, international counterfeit goods conspiracy have admitted their roles in the scheme, U.S. Attorney Paul J. Fishman announced.
Hai Dong Jiang, 37, and Fei Ruo Huang, 37, both of Staten Island, New York; Hai Yan Jiang, 34, of Richardson, Texas; Xiance Zhou, 39, and Jian Chun Qu, 33, both of Bayside, New York; and Ming Zheng, 48, of New York, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court. Dong Jiang, Ruo Huang, and Yan Jiang pleaded guilty to informations charging them each with one count of conspiracy to traffic in counterfeit goods. Xiance Zhou and Qu pleaded guilty to informations charging them each with one count of conspiracy to structure money. Zheng pleaded guilty to an information charging him with a conspiracy to launder money.
Wei Qiang Zhou, 38, of Brooklyn, New York, pleaded guilty December 3, 2013; Patrick Siu, 41, of Richardson, Texas, pleaded guilty December 4, 2013; and Da Yi Huang, 43, of Staten Island, pleaded guilty December 11, 2013, all before Judge Salas in Newark federal court, to informations charging them each with one count of conspiracy to traffic in counterfeit goods.
According to documents filed in this case and statements made in court:
From November 2009 through February 2012, the defendants ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice. The defendants and others conspired to import hundreds of containers of counterfeit goods—primarily handbags, footwear, and perfume—from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.
The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.
Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.
Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements to evade detection of the smuggling scheme and related proceeds.
Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators. The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold and pass them through to the conspirators. The conspirators paid the UCs for these “services.” In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.
UCs recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.


Tuesday, December 10, 2013

China offers ship scrapping subsidy

China shipyards are facing problems due to the ship overcapacity. 

They have implemented a scrapping subsidy of 50%.   Somewhat like the previous
U.S. "cash for clunkers" program.

From Bloomberg News

China Raises Ship-Scrapping Subsidy 50% to Trim Overcapacity

Photographer: Qilai Shen/Bloomberg
Shipyard workers sweep the ground at an assembly area at the Dalian shipyard in Dalian,... Read More
China, the world’s biggest shipbuilding nation, will increase cash subsidies for scrapping obsolete ships by 50 percent to help cut overcapacity and emissions.
The government will grant 1,500 yuan ($247) per gross ton for shipping companies to replace obsolete ships, according to a statement on the transport ministry website yesterday. The award applies to vessels scrapped in the years 2013 through 2015.
Chinese shipbuilders also stand to benefit from the subsidy, half of which is awarded only after replacement orders are placed. China Rongsheng Heavy Industries Group Holdings (1101), the nation’s biggest shipyard outside state control, rose 8.9 percent to close at HK$1.22 in Hong Kong. China Shipping Development Co. (1138), a Shanghai-based commodities shipping company, gained 0.9 percent to HK$5.35. The city’s benchmark Hang Seng Index fell 0.3 percent today.
“The program will be positive for the shipbuilding sector in the long term,” said Lawrence Li, a Shanghai-based analyst at UOB Kay-Hian Holdings Ltd. “In the near term, it may not be material for the shipping industry, as the incentive is not attractive enough and many cash-strapped shipping firms may not be able to place new orders amid a bad market.”

New Orders

Under the new program, ship operators get half the money upon completing scrapping and the rest after placing new building orders, according to the statement. By comparison, under a 2010 rule, they had to complete scrapping and place new ship orders before getting any of the subsidy.
The program is “somewhat disappointing” as it didn’t lower the age requirement for ships that can be scrapped, which means less tonnage is eligible, according to a note published today by Credit Suisse Group AG analysts led by Davin Wu.
The Baltic Dry Index (BDIY), the benchmark for commodity-moving rates, has slumped 41 percent in the past four years. The monthly index that tracks prices for all types of vessels dropped 31 percent in November from its peak in September 2008, when the global financial crisis caused orders to slump, according to Clarkson Plc, the world’s biggest shipbroker.
To contact the reporter on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net
To contact the editor responsible for this story: Vipin V. Nair at vnair12@bloomberg.net

Monday, December 9, 2013

CSAV and Hapag Lloyd in talks

As has been reported in the last week, Hapag-Lloyd and CSAV are holding talks.  Initial reports
said they were planning a merger, but as per Bloomberg News, the talks appear to center more
on a "possible business combination".   It's very difficult for two companies to come together, which is
why Hapag-Lloyd and Hamburg Sud did not come to terms during their merger talks.

However, as each company bleeds money, there will be more incentive to come to an agreement.

Not sure of the official forecasts, but my guess is this industry still has a few more bad years before a major turn around.  Actually, it could be even worse than that, as the shipyards in China haven't closed down, and those ships have to go somewhere!

Click here for link to Bloomberg News.

Hapag-Lloyd Talks to CSAV About Tie-Up to Fight Industry Slump

Hapag-Lloyd AG is discussing a possible merger with Cia. Sud Americana de Vapores SA, Latin America’s biggest container shipping line, as the companies struggle to overcome a global trade slump that has left the industry in crisis.
The talks are focused on whether “a possible business combination or any other form of association would be of mutual interest,” Hamburg-based Hapag-Lloyd said in a statement today.
Hapag-Lloyd, the biggest German container line with a fleet of 152 vessels, is still reeling from the slump triggered by the 2008 collapse of Lehman Brothers Holdings Inc., reporting a 64 percent decline in profit for the third quarter, its peak season. It’s turning its sights to CSAV after talks to merge with local competitor Hamburg Sued, owned by family-owned German holding company Oetker-Group, failed in March because shareholders of both companies couldn’t agree on terms.
The talks with Valparaiso, Chile-based CSAV “have not resulted in any binding or non-binding agreement between the parties,” Hapag-Lloyd said in the statement, without elaborating further.
CSAV surged 13 percent, the most in more than a year, after Die Welt newspaper reported last night that the Latin American container shipper is negotiating a merger with its German rival.
CSAV’s 86 percent loss in the past three years is the worst performance among peers tracked by Bloomberg. In response to a glut of new vessels, operators such as A.P. Moeller-Maersk A/S are forming alliances with competitors to lower costs and eliminate excess capacity on trade routes.

Billionaire Luksics

The billionaire Luksic family controls CSAV with a 46 percent stake. The Luksic’s holding company Quinenco SA (QUINENC) has put more than $1 billion into CSAV in the past two years after the company lost a record $1.25 billion in 2011.
Top executives of Hapag-Lloyd and CSAV last month met in Miami to discuss a possible merger, Die Welt reported on its website, without saying where it got the information.
Hapag-Lloyd is owned by a group of shareholders including German tourism company TUI AG (TUI1), HSH Nordbank AG and the city of Hamburg. TUI, which holds a 22 percent stake, has endorsed an initial public offering of the shipping company. CEO Friedrich Joussen on Nov. 7 said that he doesn’t expect an exit through an IPO before Hapag-Lloyd’s Rolf Habben-Jansen replaces current CEO Michael Behrendt next July.
Hapag-Lloyd formed an alliance in Asia-Europe trade, called G6, in March 2012. The other partners are APL, Hyundai Merchant (011200) Marine, Mitsui O.S.K. Lines (9104), Nippon Yusen (9101) Kaisha and Orient Overseas Container Line.
To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net
To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

Wednesday, December 4, 2013

Say What?? Guess the ILA guys had a liquid lunch.

Finally, after 60 years the Waterfront Commission is doing their job.   It's a bit difficult for the ILA
officials to understand that just because they say something, does not make it true.

Witness this statement (as reported by the Waterfront Commission)

 In today’s statement attacking the Commission’s efforts, NYSA President John Nardi staggeringly asserted that the ILA is “already a diverse workforce.” This is directly contradicted by the demographics of the only two ILA locals that have joined in the lawsuit, Local 1804-1 and Local 1814, whose registrants are less than 2% and 8% African American, respectively. It is for this very reason that the New York State Division of Human Rights has filed charges against the NYSA, MMMCA, ILA, and ILA locals alleging discriminatory hiring.

Seriously John?  The ILA is a diverse workforce?   I guess you don't know how to read demographic statistics.  I highlighted to word "staggeringly", which I am sure was not the first choice of words which came to mind after reading this statement.

Anyway, here is the link to the full report, and the full report

Statement of the Waterfront Commission of New York Harbor in Response to Press Release by NYSA and ILA Regarding Lawsuit Filed
November 22, 2013
           Today, the New York Shipping Association, Inc. (NYSA) and International Longshoremen’s Association, AFL-CIO (ILA) announced the filing of their complaint against the Waterfront Commission of New York Harbor. That complaint, which alleges interference in their collective bargaining process, is actually designed to prevent the Commission from fulfilling its mandate to ensure the fair hiring of a diverse workforce in the Port.
           Those allegations of improper interference with the collective bargaining process are categorically untrue. Over the past sixty years, courts have consistently upheld the Commission’s actions when a collective bargaining agreement has violated the letter and spirit of the Waterfront Commission Act.
           As shown by public hearings, current provisions in the collective bargaining agreements of the ILA, NYSA and Metropolitan Marine Maintenance Contractors Association (MMMCA) have perpetuated disparate hiring practices, resulting in an incredible lack of diversity in waterfront employment, as well as an income gap among those minorities that are employed there. Indeed, the hiring, training and promotion practices of the industry have led to no/low-work, no/low-show positions generally characterized by outsized salaries provided to a privileged class. Those with such positions are overwhelmingly given to white males connected to organized crime figures or union leadership.
           In today’s statement attacking the Commission’s efforts, NYSA President John Nardi staggeringly asserted that the ILA is “already a diverse workforce.” This is directly contradicted by the demographics of the only two ILA locals that have joined in the lawsuit, Local 1804-1 and Local 1814, whose registrants are less than 2% and 8% African American, respectively. It is for this very reason that the New York State Division of Human Rights has filed charges against the NYSA, MMMCA, ILA, and ILA locals alleging discriminatory hiring.
           To combat such practices, the Commission has asked that the industry implement a hiring plan that will result in individuals being hired in a fair and non-discriminatory basis in accordance with state and federal laws - - as is required of all other employers. In response, the NYSA and ILA issued a press release expressing frustration with the Commission’s “bureaucratic delays,” claiming labor shortages have had a resultant negative economic impact on cargo flow. During subsequent discussions with The Port Authority of New York and New Jersey, the NYSA was forced to retract that statement and publicly agreed that the Commission was, and is not, delaying hiring, and that applicants were actively processed.
           Indeed, the Commission has expeditiously processed each and every applicant referred, in order to put people to work in the Port as quickly as possible. Many NYSA and ILA referrals have been prequalified and are now ready for employment. The Commission has also offered a diverse prequalified pool of labor assembled from government employment centers in New York and New Jersey, to alleviate any immediate labor shortages. Those individuals, once described by ILA President Harold Daggett as “garbage,” were summarily rejected, with the NYSA claiming that their employment was prohibited by the provision of the collective bargaining agreement at issue.
           In today’s press release, the NYSA and ILA indicated that the Commission has obstructed their efforts to achieve productivity and growth. Over the past several weeks, terminal operators have indicated that there is a growing need for immediate labor. As of today, there are 136 individuals – many of whom are military veterans – prequalified to be put to work in the Port. To date, the industry has simply chosen not to do so. Instead, they have responded with a baseless lawsuit.
           The NYSA’s last meritless attempt to challenge the Commission’s authority was summarily dismissed by the federal court, and its appeal was likewise denied. That litigation needlessly depleted its members’ resources. Today the NYSA has definitively demonstrated that it no longer represents the interests of its terminal operator members but, rather, that of the ILA. This attempt to institutionalize discrimination through collective bargaining agreements will not be tolerated. The Waterfront Commission of New York Harbor will vigorously and successfully defend this lawsuit.