C.H. Robinson to purchase Phoenix International

Press release

--(BUSINESS WIRE)--Sep. 25, 2012-- C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (Nasdaq: CHRW), today announced that it has reached a stock purchase agreement to acquire Phoenix International, Inc. ("Phoenix") for $571.5 million in cash and approximately $63.5 million in newly-issued C.H. Robinson stock. The agreement is subject to certain customary closing conditions, including regulatory approval. Closing of the acquisition is expected to occur in the fourth quarter of 2012. C.H. Robinson will use existing cash and plans to enter into a revolving credit facility with major banks to finance the cash portion of the purchase price. The acquisition is expected to be modestly accretive in the first year.

Phoenix is a privately-held international freight forwarder. In its most recently completed fiscal year, as of June 30, 2012, Phoenix generated gross revenues of approximately $807 million, net revenues of approximately $161 million and adjusted operating income of approximately $48 million.

Phoenix primarily provides international freight forwarding services, including ocean, air, and customs brokerage, currently serving approximately 15,000 customers globally. Phoenix has approximately 2,000 employees, located in 76 offices in 15 countries. The company is headquartered in Chicago, Illinois. 

click here for link

ILA Agrees to 90 day extention of contract

This from the FMCS web-site

Release Date: 9/20/2012

WASHINGTON, D.C. — "I am pleased to announce that at the close of today’s productive negotiation session, in which progress was made on several important subjects, the parties have agreed to extend the collective bargaining agreement due to expire on September 30, 2012 for a ninety (90) day period, i.e. through December 29, 2012. In taking this significant step, the parties emphasized that they are doing so “for the good of the country” to avoid any interruption in interstate commerce.

"This extension will provide the parties an opportunity to focus on the outstanding core issues in a deliberate manner apart from the pressure of an immediate deadline. The negotiations on the Master Agreement will be conducted during the same time frame as negotiations for local agreements. The negotiations will continue under the auspices of the FMCS. Due to the sensitive nature of these high profile negotiations, we will have no further comment on the schedule for the negotiations, their location, or the substance of what takes place during those negotiations."

click here for link

ILA contract talks to resume Sept. 19, 2012

According to the Baltimore Sun, contract talks between the ILA and USMX (representatives of
the carriers and terminals) will resume today, at a hotel in New Jersey.

It had been reported the locations of the talks would be undisclosed...but, admittedly there are
a lot of hotels in New Jersey.

These negotiations are being mediated by the Federal Mediation and Coalition Services.

The ILA union contract expires Sept. 30th, and the Union membership has already
authorized a strike.

From The Baltimore Sun

The maritime alliance says dockworkers are driving up shipping costs by taking advantage of liberal overtime rules. It says longshoreman are well compensated, making an average of $124,000 annually in wages and benefits, with management paying 97 percent of the cost of their health care plan.
The union says its members do dangerous work, often in adverse weather, and must be protected and retrained as the industry changes.

click here for link to article

Racketeers on the New York/ New Jersey Waterfront

 I don't think I need to add any comments to this.....it kind of says it all.

From The Journal of Commerce

 

Administrative law judge upholds Waterfront Commission ruling

An administrative law judge has upheld the Waterfront Commission of New York Harbor’s decision to revoke a Ports America hiring agent’s license to work in the Port of New York and New Jersey because of association with racketeers.

The Waterfront Commission revoked the license of Pasquale Pontoriero, who was accused of associating with the late Tino Fiumara, a Genovese mob capo, and Stephen DePiro, a Genovese soldier.

Fiumara died in September of 2010; DePiro is serving a federal prison sentence and awaiting trial on federal racketeering charges involving the extortion of ILA members in the port.

Update ILA contract talks

The contract talks between the ILA and USMX are to restart this week, with a mediator.

The locations of the talks are being kept secret.  I presume the day to day outcome of the
talks will only be available from either the ILA, USMX, or the mediator.  I don't really know
what has been agreed.

The USMX web-site,  should post updates on the ILA negotiations, when available.

click here for the link.

So far, nothing has been posted.

Suggested Changes on the Waterfront

The negotiations with the ILA are to start again next week.   This time with an arbitrator from
FMCS.  From their web-site

Release Date: 9/6/2012

Upon the request of the Federal Mediation and Conciliation Service (FMCS), the parties have agreed to resume negotiations under our auspices during the week of September 17, 2012.  Due to the sensitivity of this high profile dispute and consistent with the Agency’s longstanding practice, we will not disclose either the location of the meeting or the content of the substantive negotiations that will take place.

I trust they will address many of the issues raised in the Waterfront Commission report of
March 2012.   It's a lengthy report, but appears to spell out the real problems with the
ILA Union at the ports of NY/NJ.

Of course, this is only one of the ports represented by the ILA, although it is the biggest, and
NJ is where the union is headquartered.

The report has some real gems, such as

Mr. Daggett emphatically testified that shop stewards are entitled to their six-figure
salaries.107 He claimed that shop stewards work twenty-four hours a day and help ensure that
there are “no labor problems” in the Port.108 Mr. Daggett testified that $400,000 “[is] not a lot of
money today,”109 a comment that would appear to be out of touch with reality.

In fact, in my opinion, the report is so damaging I don't know why the government hasn't taken
some action and closed down the ILA.   I guess everyone was waiting for the next round of
contract negotiations.  I don't know.   Of course it's difficult to tackle these problems,
and because the union is contracted by a "collective" and not one company, it's even more
difficult.

Here are the suggestions put forward in the report.   They are very valid, and I trust whomever
from the FMCS is handling the negotiations will read this report, and attempt to put these
changes in to place.

Based on the foregoing, the Commission recommends the following changes by the
shipping industry:

   “Ship time “or “terminal time” payments that go to a single person, whether or not the
person is actually working, should be eliminated. The implementation of a shift system,
rather than a continuous operation system, for all dockworkers would be a highly
advantageous change for Port efficiency.

    “Prime” positions – inflated salaries for little or no work should be eliminated.

     Desirable positions should be fairly distributed based upon sonority and merit. Training
for those positions should be fair and based upon objective criteria that will reduce –
rather than increase – the lack of diversity in the Port.

    Secret ballot elections should be held for shop stewards positions. These positions should
be for a fixed term of years with a clearly delineated process for recall and removal.

    Shop stewards should be assigned the same responsibilities and be paid the salary as their
co-workers. While time off should be given for the purpose of conducting union business,
any additional compensation for such work should be paid by the union under strict rules.

   All elected shop stewards should be trained as to the provisions in the applicable
collective bargaining agreements and their responsibilities in enforcing them.


 Check-in of checkers and longshoreworkers by the timekeeper should be done in a
manner that capable of being audited, which takes advantage of technology and does not
highly compensate favored individuals for little or no work.

Click here for link to complete report.  It is worthy reading.

Carriers continue to collude

It's difficult for carriers to give up the long held practice of colluding on rates.   In the past
it was legal, but no longer.

From The Journal of Commerce

Antitrust investigation also includes car carriers

CSAV said it and some of its employees have received subpoenas from U.S. government authorities and the Competition Office of Canada in connection with an investigation under antitrust law that includes it and a group of car carriers.

Although the Chilean carrier did not identify the car carriers that are also being investigated, they may be among the 10 Japanese, South Korean and Norwegian shipping lines being investigated by the Japan Fair Trade Commission.

CSAV said it notified the Chilean Securities and Insurance Supervisor of the investigation and that its management “has dedicated itself to gather information.” It said its board of directors has instructed the company management to provide maximum cooperation in connection with the investigation.

“The investigation seeks to inquire into the existence of antitrust law violations related to cooperation agreements on prices and allocation of clients between car carriers,” CSAV said.