(page3)

• Freight rates appear to be falling in both the bulk and container trades.  Even the strong demand for dry bulk tonnage is not expected to be enough to stop the downward pressure. A number of factors have been cited as contibuting to the downturn.  Key among these are the slowdown of Chinese economic growth and surplus tonnage.  The number of ships on order and the next generation of large container ships are expected to add to the problem in the coming years.  In the containership industry, some experts believe that cargo demand would have to grow by 15% over the next two years to fill the ships about to be delivered.  When shippers negotiate lower rates and apply pressure on shipping lines, there has generaly been a knock-on effect on ports which come under pressure from those shipping lines to reduce the cost and time of ship calls.
  
  
• Maritime security is back on the news with the US Homeland Security Secretary announcing that as the first part of the new Transportation Workers Identification Credential (TWIC) programme, the US Coast Guard will begin collecting names and basic identification data on dockers and other port workers in the US.  The full identification programme is expected to be rolled out nationally within the next year.  Once implemented, only workers with the appropriate biometric identity documents would be allowed on port premises without an escort.  Concerns have been raised over whether these powers would be used to exclude those with prior criminal records.  The Senate Committee on Homeland Security and Government Affairs has also approved the Green Lane Maritime Cargo Security Act, which calls for 100% container inspection overseas ‘as soon as practicable and possible’, with a proviso that the Homeland Security Secretary identify three ports within 90 days of enactment where a pilot programme would begin.

4.  AMERICAS & THE CARIBBEAN

• 
  
  
• Shipping lines are reported to be exploring alternative gateways for container traffic arriving in the US from Asia.  Prince Rupert in Canada, Ensenada and Lazero Cardenas in Mexico are being cited as the front runners.  A number of lines have expressed interest in calling at Prince Rupert, located 500 miles north of Vancouver.  It has direct rail connections to Chicago and the midwest, and direct transpacific sailings would be a day shorter than to southern California.  Congestion and potential cost savings are key reasons for the search for alternatives.
  
  
• The Panama Canal Authority has finally unveiled its plans for its expansion project that includes the construction of a 3rd set of locks capable of handling containerships up to 12,000 teu.  The project has to be approved by the Cabinet, National Assembly and national referendum by the end of next year.  Panama is aiming to be ‘at the centre of global trade and a great maritime hub’.
  
  
• Competition between national ports appears to be intensifying in Mexico and Chile.  There are proposals to expand Guaymas in north-west Mexico to make it a transhipment point for the country’s export assembly plants and to handle the overflow cargo from Los Angeles/Long Beach, bringing it into competition with Manzanillo.  In Chile, ULTRAMAR’s Terminal Pacifico del Sur in Valparaiso has recently managed to lure MSC’s business away from its rival, the San Antonio International Terminal.  NYK Line, CCNI and Hamburg Süd have also switched.  San Antonio is apparently set to lose nearly ¼ of its volumes. Valparaiso has aquired two post-panamax gantry cranes and adopted an aggressive marketing policy following the loss of P&O Nedlloyd.

5.  ASIA PACIFIC

• 
  
  
• ICTSI, the Manila-based terminal operator, was forced in 2001 to divest itself of the majority of its international terminal portfolio to pay off a bond issue that was coming into maturity.  Since then it has been rebuilding its network.  ICTSI is reported to be interested in investing in other parts of South East Asia.  Vietnam and Indonesia appear to be of interest to the company.  In the company’s view, there are several ports in Indonesia that are now domestic ports that have the potential of becoming hub ports in the future.  They may ‘invest a little early and nurture them to growth’.
  
  
• Hanjin Shipping recently agreed a deal to operate four berths at phase 2-1 of the New Port complex in Pusan, South Korea.  The agreement is the first of two terminal operating contracts that the port authority is due to sign with shipping lines.  Hyundai Merchant marine is also expected to agree a deal to operate phase 2-2 of the complex. The Pusan Newport Co terminal was formally opened in January, marking the completion of the first phase of a development that will make the port amongst the largest in the world by capacity.  To support the terminal, a total of 4m sq miles of terminal and logistics support area has been designated as a Free Trade Zone.  Developments at the port of Pusan have had a negative impact on trade unions, which have been reported in the previous issue of PIU.
  
  
• The world’s second largest containership operator, MSC, has expanded the scope of its Indian operations by connecting Chennai, Tuticorin and Cochin to its global liner network.  India’s industrial development, anticipated container growth and development of new container terminals in these three areas were cited as key factors.

6.  AFRICA AND MIDDLE EAST

• 
  
  
• Cosco Pacific Ltd, a subsidiary of China Cosco Holdings Ltd. has taken its first step in port investment in the Middle East by signing an agreement to buy a 20% stake in the Suez Canal Container Terminal in Egypt.  It would buy its stake from Egyptian International Container Terminal SA, a subsidiary of APM which currently ownes 60% of the terminal.  The deal is subject to Egyptian regulatory approval.

continue reading >>

To contribute to the PIU, please contact Sharon James, Dockers’ Section (james_sharon@itf.org.uk; fax: +44 2079409275).