No Solace for MOL Comfort ShippersWhen the bow of the MOL Comfort sank in the Arabian Sea on July 10, it ended a three-week saga for the 8,000-TEU ship that had snapped in two en route from Singapore to Jeddah, Saudi Arabia. For shippers who had cargo in any of the nearly 4,000 containers lost, the saga will continue. MOL subsequently pulled six sister vessels from operation. In a strange twist, Asia-Europe rates have rallied in recent weeks, a phenomenon SeaIntel Maritime Analysis’s Lars Jensen attributes in part to “the involuntary scrapping of the MOL Comfort.” Photo courtesy gCaptain.

Mega-Carriers Form Mega-AllianceWhile it won’t come together until the second quarter of next year, the gigantic vessel-sharing agreement called the P3 Network among Maersk Line, Mediterranean Shipping Co. and CMA CGM already is forcing other carriers to form similar mega-alliances to compete with it. The P3 Network won’t curtail the glut of vessel capacity that is depressing rates on the east-west trades where the three carriers will collaborate, but it will enable them to cut costs by deploying their largest, most fuel-efficient ships.

China Takes Out the TrashPresident Xi Jinping’s crackdown on adulterated products entering China, part of a larger environmental push by the manufacturing giant, struck a blow to U.S. and other global scrap exporters and the carriers moving their goods. The so-called Green Fence policy has been a big factor in curtailing growth of U.S. exports of scrap paper, plastics and metal, which make up the lion’s share of containerized shipments leaving the U.S., “to almost flat,” JOC Economist Mario Moreno said.

Court Declines to Block Hours of Service RulesThe U.S. Court of Appeals in Washington listened to trucking's arguments against the latest changes to truck driver hours of service rules in March but didn't move to stop those changes from being implemented July 1. The Federal Motor Carrier Safety Administration refused to stretch its compliance deadline any further, which meant the mandatory break and a revised 34-hour restart provision took effect as scheduled. Shippers are bracing for potential capacity shortages and higher pricing.

Maersk’s First Triple E Sets SailMaersk Line took delivery of the Maersk Mc-Kinney Moller, the first of the carrier’s 20 Triple E mega-ships, at the end of June. The 18,000-TEU vessel set sail on its maiden Asia-Europe voyage carrying only 14,000 containers, because many of the 16 ports certified to handle the Triple E ships don’t have cranes tall enough to handle it when fully loaded.

China Shipping Trumps the Triple EChina Shipping Container Lines took the mega-ship up a notch, ordering five 18,400-TEU giants that will surpass Maersk’s Triple Es as the largest container ships afloat. CSCL will deploy the new ships on a 10-year joint Asia-Europe service with United Arab Shipping Co., which also reportedly is considering an order for ships of that size. Mediterranean Shipping Co. also may join the mega-ship ranks, as it is reported to be chartering three 18,400-TEU ships recently ordered by Hong Kong Asset Management.

YRC, Arkansas Best’s Brief FlirtationYRC Worldwide and Arkansas Best roiled trucking and Wall Street when word leaked in June that the two companies had discussed — ever so briefly — a potential acquisition. YRC Worldwide CEO James Welch later called it “a one-hour conversation that never went anywhere,” but the prospect of a merger raised questions about the health of the less-than-truckload market and whether further consolidation would be beneficial, and to whom. The debate didn’t hurt YRC Worldwide’s stock, which surged in the quarter.

Long Beach Port Loses Its LeaderChris Lytle was making quite a name for himself as executive director of the Port of Long Beach when he announced in May that he would head north in August to assume the same role in Oakland. The popular Lytle, who was executive director in Long Beach for only 18 months, was implementing a $4.5 billion construction program there when Oakland lured him away to take charge of its seaport and airport.

Delays Hit NY-NJ PortIt’s been a long, hot summer at the Port of New York and New Jersey already. Problems began in early June when Maher Terminals’ deployment of a new operating system caused miles-long truck lines. Delays spread as 15 ship calls were rerouted to other terminals. Truckers are complaining of lower productivity by drivers and increased costs for chassis rental and container use. The delays also have been costly to shippers, carriers and terminals. And the annual peak season is just starting.

UPS, Teamsters Win Half the BattleTeamsters employees at UPS approved a new five-year labor pact but rejected several regional supplements key to implementing the agreement in a vote that ended in late June. That sent the union and the United States’ largest Teamsters employer back to the bargaining table. The current contract covering 235,000 UPS package workers, which expires July 31, was extended to give both sides time to negotiate. Teamsters at less-than-truckload carrier UPS Freight also rejected a contract proposal.

ABF Obtains Labor ConcessionsAt ABF Freight System, Teamsters employees approved a five-year master contract in June but also rejected a number of regional supplements, ensuring negotiations with the sixth-largest less-than-truckload carrier would continue into the summer. The supplements must be approved before the contract can take effect. The contract includes a 7 percent cut in wages that would gradually be returned to employees over the life of the contract. ABF sought deep wage cuts and improved productivity to reduce costs.

CEVA Gets a LifelineCEVA Logistics, the world’s fifth-largest logistics provider, completed a debt-for-equity swap in May. The deal eliminated $1.7 billion in consolidated net debt for CEVA, which some analysts had said faced possible bankruptcy. With the refinancing complete, CEO Marvin Schlanger says he wants to move CEVA beyond its roots as an amalgam of Netherlands-based TNT and U.S. logistics provider EGL. Although CEVA posted record revenue of $9.4 billion in 2012, it has been hurt by a shift from air freight to ocean shipment, which provides forwarders with lower margins.

Congress Pushes Freight ForwardThe U.S. House of Representatives took a rare step in creating a special panel dedicated to hearing from major shippers, logistics providers and transportation companies about how to make the nation’s freight network more efficient. Hearings held by the Panel on 21st Century Freight Transportation aim to help members pass port and inland authorization legislation and the next surface transportation bill. Considering the number of new House members, the panel is providing a valuable education on why freight movement is essential to a healthy economy.

Halfway There for WRDAThe U.S. Senate in May passed by a strong margin major legislation aimed at reforming the Harbor Maintenance Trust Fund and authorizing major port and inland waterway projects. The chamber’s version of the Water Resources Development Act, last passed in 2007, also would speed up construction of maritime projects. The U.S. House of Representatives now must craft its own version, so that ports and inland waterways can better deal with mounting infrastructure challenges.

Hong Kong Takes a HITMarch went out like a lion at the Port of Hong Kong, as dockworkers struck five facilities operated by Hutchison International Terminals. When the walkout ended six weeks later, dockworkers had received what they said was their first pay increase in 10 years, but the port was left with a backlog of containers that took seven days to clear. More than 100 ships were rerouted away from Hong Kong during the strike. The world’s third-largest container port, whose traffic already had been ebbing, is in danger of falling further behind global leaders Shanghai and Singapore.

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