The US Federal Maritime Commission (FMC) will retain the requirement for ocean container carriers to file service contracts in response to a petition from the World Shipping Council (WSC) to exempt carriers from publication requirements in the Shipping Act. The FMC agreed that continued publication of essential terms no longer serves a purpose but rejected the WSC's call to eliminate the ocean carrier confidential service contract filing requirements of the Shipping Act, reports American Shipper. "I would point out that we have three very large alliances that carry something north of 80 per cent of the cargo in the US east-west trades," said FMC chairman Michael Khouri. "One thing we're making sure is that there is competitive pricing among the members in each alliance."Mr Khouri also said eliminating the service contract filing requirement at this time would impact the FMC's "effectiveness and necessity for tools to look into areas of anti-competitive behaviours."
China plans to ask the US to lift sanctions against the Dalian units of China COSCO Shipping Corp. during trade negotiations that started earlier today in Washington. Four other Chinese entities were also sanctioned last month along with COSCO but it is unclear if the Chinese delegation plans to seek relief for those companies.
Nearly 300 oil tankers globally have been placed off limits as companies fear violating US sanctions against Iran and Venezuela, driving freight rates to new highs. Day rates for VLCC’s are rising rapidly toward the $200,000 per day threshold and some have already fixed at a much higher level. The Tankers International pool reported on Oct. 11 that the 2012-built VLCC Ingrid has just been booked at the equivalent of $301,219 per day (on the basis of 45.4 days). The percentage of the VLCC transport cost to cargo value is now quadruple what it was one year ago – but there still appears to be plenty more room for rates to run. US-listed tanker stocks are now surging upward in response.
The US Surface Transportation Board (STB) is urging railroads to work closely with shippers to address concerns about demurrage practices shippers consider unreasonable and nothing more than revenue generators for the railroads. The federal agency issued a proposed rule on two of three petitions it considered but declined to go beyond a policy statement on the main topic of demurrage and accessorial policies. The statement, however, was clear that railroads must meet certain standards when imposing penalties. Although the decision applies only to non-containerized cargo, the general standards are relevant to the Federal Maritime Commission’s (FMC's) proposed interpretive rule on port demurrage, which remains open for comment through Oct. 31. The STB’s decision on the three petitions is open for comment through Nov. 6. The same questions are at the heart of both inquiries. What are reasonable business practices? What is the line between shippers taking too long to turn assets (containers, boxcars, gondolas, or hopper cars) and unreasonably short periods placing an undue burden on shippers?
The rail demurrage policy statement comes after two days of testimony in May when shippers argued Class I railroads will deliver large bunches of railcars while providing only 24 hours to unload the cargo before assessing penalties. Although the testimony was about commodities, precision scheduled railroading emphasizes longer train sets and can also cause bunching of containers. Class I railroads consider demurrage vital to maintaining network fluidity.
The federal government proposed a new rule today to designate 302,961 square nautical miles in the Pacific Ocean as critical habitat for three populations of endangered humpback whales. The proposal is to help protect migrating whales from ship strikes, entanglement in fishing gear, and oil spills.
The rule designates 48,459 square miles of critical habitat off the coast of California, Oregon and Washington for the humpback population that winters in Central America. The Mexico population got 175,812 square miles in the North Pacific Ocean, including Bristol Bay, Bering Sea and Gulf of Alaska — regions that also made up the 78,690 square miles listed for the Western North Pacific humpback population. Eliminating the overlap among the three populations, a total of 175,812 square miles are proposed for protection (proposed maps available here).
The US Department of Agriculture has confirmed that private exporters sold 464,000 tonnes of U.S. soybeans to China for shipment in the 2019/20 marketing year that began Sept. 1.This announcement was part of a flurry of activity resulting from a tariff-free quota awarded to some importers causing soybean prices to rally ahead of trade talks nexxt week. Chinese buyers purchased more than 1.5 million metric tons of U.S. soybeans last week alone, according to data from the US Agriculture Department, and have purchased at least 716,000 tons this week.
Senator Edward J. Markey, a member of the Senate Foreign Relations Committee and Senate author of the Green New Deal, has introduced the Block all New (BAN) Oil Exports Act (S. 2527) to amend the Energy Policy and Conservation Act to reinstate the four-decade ban on the export of crude oil and natural gas produced in the United States. This move follows Senator Markey’s concerns with the US dependence on foreign oil following the Saudi Oil Field Attack. The Green New Deal seeks to transition to 100 percent clean, renewable, zero-emitting energy and put an end to America’s dependence on fossil fuels that put the US economy and national security at risk.
United Parcel Service Inc. (UPS) is the first US company to be given government approval by the Federal Aviation Administration to run a drone airline. UPS plans to expand deliveries on hospital campuses and eventually other industries. Its subsidiary, UPS Flight Forward, has operated more than 1,000 flights at Wake Forest University’s medical centre in Raleigh, North Carolina. The designation removes limits on the size of the company’s potential drone operation. Flight Forward can fly an unlimited number of drones, and fly drones at night installing the necessary colored warning lights on each drone.
Earlier this year a new national marine sanctuary was established about 40 miles south of Washington, DC to protect the remains of more than 100 abandoned steamships and vessels (referred to as the “Ghost Fleet”) built as part of America’s engagement in World War I. Although the ships never saw action during the war, their construction at more than 40 shipyards in 17 states reflected the massive national wartime effort that drove the expansion and economic development of waterfront communities and maritime service industries. The oldest ships sank there in the 1700s; the most recent ones are from the 20th century. Their skeletal remains rise up in the air, looking like spirits rising out of the Potomac River. It is said to be the first sanctuary to protect not only sea creatures, but also partially covered shipwrecks.
With volumes down by almost 30 percent at some of the six largest West Coast ports, the ports of Long Beach, Los Angeles, Oakland, Portland, Seattle and Tacoma have sent a joint letter to President Donald Trump, urging him to pursue fair and mutually beneficial trade agreements. The organizations have shared concerns that the long-term impacts of the escalating trade conflict between China and the United States will create irredeemable economic harm to employers, workers, residents and international partnerships along the West Coast and throughout the entire country. The letter also highlights the latest impacts related to back-and-forth tariffs between the United States and China.
Mediterranean Shipping Co. has regained privileges via the United States trusted trader program after a temporary suspension stemming from the June 17 seizure of 20 tons of cocaine from a vessel at the Port of Philadelphia. After the largest US drug bust took place on board on the MSC’s ships, US Customs and Border Protection placed a 90-day suspension from C-TPAT which ended on Sept. 16. MSC vessels have been involved in three other drug-related incidents this year.
CMA CGM has dropped a proposed detention/demurrage processing fee for US ports only 48 hours after telling customers about the charge, that was planned for October 15. The original customer advisory stated the carrier would “assess an administrative fee of US $50 for each per diem/daily usage charge for the later return of equipment beginning Oct. 15. The charge was dropped after significant pushback was received from beneficial cargo owners (BCOs). The FMC is engaged in an interpretive rule-making procedure regarding demurrage and detention under the Shipping Act. Separate from the CMA CGM issue, the FMC on Friday announced it had extended the public comment period to Oct. 31.
The Port of Long Beach is instituting an incentive program which seeks to attract more containerized cargo. This announcement comes a year after the Port of Los Angeles launched a similar program. The one-year program will go into effect on Oct. 1. Container carriers will be given a payment of $10 per TEU for additional cargo that moves through the port over and above the cargo they handled the prior year and over and above the general growth in the trans-Pacific trade. The program applies to both loaded import and export containers, but payouts are capped at $2 million per carrier.
US Customs and Border Protection (CBP) agriculture specialists intercepted 146 destructive Asian Gypsy Moth egg masses on four ships recently in the port of Baltimore. One vessel alone was found with 126 egg masses. There has been a surge in the population of AGM this season and while the high-risk period is over in Canada, crew onboard vessels from Japan, Korea and China should continue to check vessels for AGM egg masses while en route to North American ports.
The Columbia River Steamship Operators’ Association has filed a lawsuit in federal court over the Port of Astoria’s $300 pier maintenance fee. They claim that the fee is unconstitutional as it applies to all ships over 250 feet regardless of whether the ship stops at the pier or not. The Port has charged about 250 ships so far, holding the money in a protected account controlled by the association. Once a legal decision is made on the fee, the money will go to the Port or back to shipping agents.
US Transportation Secretary, Elaine Chao, is under investigation for allegedly using her government posting to benefit Foremost Group, a shipping company owned by her father. The House Oversight and Reform Committee has requested documents, citing “troubling questions” over whether she used her office for personal gain. Chao has until the end of the month to send the requested documents.
The US Coast Guard has pulled four trapped men alive from a capsized car carrier by drilling into the hull’s steel plates. The M/V Golden Ray overturned in the US port of Brunswick with 24 crew members inside sparking a dramatic, successful rescue mission over the weekend. All four were described as alert and in relatively good condition and were taken to a hospital for further evaluation. Three of the South Korean crew members came out in the midafternoon. The fourth man, who was trapped in a separate compartment, emerged three hours later. With all crew members accounted for, operations will now shift fully to environmental protection, removing the vessel and resuming commerce. Brunswick is one of the busiest ports for vehicles. Nearly 614,000 vehicles and heavy machinery units move through the port annually. The cause of the capsizing remains under investigation.
A familiar sight to many here locally, the Houston Ship Channel was shutdown this week when 11 individuals affiliated with Greenpeace suspended themselves from the Fred Hartman Bridge. The danglers blocked ship traffic to and from five major oil refineries and other chemical and oil export facilities for 18 hours. Harris County Sheriff’s office stated that the demonstrators will face multiple charges including obstructing the roadway and obstructing the waterway. The office is checking with the area US Attorney's office about other possible charges.
Earlier this week, Greenpeace attempted to block the MV Indian Goodwill from docking at a coal terminal at Gdansk, Poland. Polish customs agents boarded Greenpeace’s Rainbow Warrior that evening, broke into her wheelhouse and detained her master on suspicion of violating maritime safety regulations. The Indian Goodwill's delivery was held up again later in the week by activists who scaled two unloading cranes at the terminal, hanging banners and blocking operation of equipment.