The World Trade Center Miami welcomes you to SeaCargo Americas News, offering you updates from the industry and useful information on the fourth year of the SeaCargo Americas Conference and Exhibition. 

SEACARGO AMERICAS NEWSLETTER
SAVE THE DATE
NEWS IN THE AMERICAS

• SeaCargo/Air Cargo Conference Invites Obama
• Port of Miami Seeking On-dock Rail
• Canada and Panama Sign Trade Agreement
• Ocean Freight Market Heads into Choppy Waters
• Report Predicts Long Term Logistics Recovery
• Seaboard Deploys Larger Ship to New Orleans
• Peruvian Port of Ilo - One to Watch
• Senate Bill to Restructure US Customs
• Britain Reclaims Control of Turks & Caicos

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SAVE THE DATE……November 4-6, 2009

NEWS IN THE AMERICAS

SeaCargo/Air Cargo Conference Invites Obama
The sponsors of the SeaCargo Americas and Air Cargo Americas joint conference in November have invited President Barak Obama “to confront difficult issues and speak directly to those who are impacted by adverse economic conditions as you have recently done with the financial industry, the auto industry and the domestic health care industry.”

The 10th Biennial Air Cargo Americas and the 4th SeaCargo Americas conference and exhibition sponsored by the Miami International Airport, the Port of Miami and the World Trade Center Miami is a historic, concurrent gathering taking place in Miami Nov. 4-6, 2009.

It is the first time that representatives from the two most high-value domestic economic engines – air cargo and sea cargo – will be gathered in one hall at one time. For three days more than 4,000 leaders of union organizations, exporters and importers, intermediaries, carriers, shipping lines, airports and seaports of the Americas will be sharing ideas, building business and hearing the government’s plans and proposed solutions.

The steering committee told the president, “We would like you to take the broader view and share your vision of the future of the hemisphere’s commercial trade communities in this era of growing regulation and diminished trade activity. We are confident you are aware that air cargo and sea cargo are at their lowest points in recent history.”

The invitation said, “Our ports and airports and those of our trading partners in the hemisphere are among the most negatively impacted. And we are waiting in anticipation for the leadership you promised earlier this year in Trinidad. At a hemispheric conference in June in Trinidad Obama said, “I pledge to you that the United States will be there as a friend and a partner, because our futures are inextricably bound to the future of the people of the entire hemisphere. And we are committed to shaping that future through engagement that is strong and sustained, that is meaningful, that is successful, and that is based on mutual respect and equality.”

Port of Miami Seeking On-dock Rail
The Port of Miami is seeking a way to restore the port's bridge and on-port rail infrastructure, upgrade a now-underutilized Florida East Coast Railway branch to allow for faster trains and quieter operations, and use it to run cargo between the port and the railway's existing Hialeah yard, which would be transformed into an inland port.

Port and railway officials are gunning for "tens of millions" of federal stimulus dollars to get the rail project on track, Port Director Bill Johnson said. The application is still in the works and due Sept. 15. Railway President David Rohal estimates a $30 million price tag. Each train would eliminate 100 to 200 trucks from downtown streets, estimates say.

Some, including Miami-Dade Commissioner Joe Martinez as recently as last week, have proposed rail as an alternative to the long-planned tunnel, designed to redirect trucks via underwater tubes.

Mr. Johnson says both are needed to improve port access and freight capacity — especially in five years when a Panama Canal expansion is complete, making way for some of the world's largest cargo ships. "It isn't either/or," he said. The rail plan also takes into account potential passenger transit along the corridor down the line. The idea is to move the cargo track to one side, Mr. Rohal said, leaving space for future passenger lines. http://www.miamitodaynews.com/news/090813/story2.shtml

Canada and Panama Sign Trade Agreement
Canada and Panama have signed a free trade agreement, alongside new agreements on beef exports, labor and environmental cooperation.

The Canada-Panama free trade agreement will eliminate tariffs on over 90 percent of Canada’s present exports to Panama, across a range of sectors, including industrial, agricultural, forestry, fish and other seafood. It will also expand market access for Canadian services providers in such areas as information and communication technology, and energy and financial services.

The Prime Minister of Canada, Stephen Harper, said that, while Canadian businesses and exporters would have greater access to the Panamanian market thanks to the agreement, he expressed his particular pleasure with Panama’s decision to re-open its market to Canadian beef exports for the first time since 2003.

“Reaching a free trade agreement with a key hemispheric partner like Panama is the logical next step in our policy of pursuing deeper integration and closer cooperation throughout the Americas,” said Stephen Harper. “I am pleased that strong labor and environmental standards are included in this deal. This agreement will open up new opportunities for people and businesses on both sides of the Canada-Panama trading relationship.”

Canadian merchandise exports to Panama, while small, totaled almost CAD128m (USD116m) in 2008, up more than 48% over the previous year.

Canadian beef exports will have access to Panama for the first time since 2003. Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, and Federal Agriculture Minister, Gerry Ritz, confirmed that Panama has approved Canada's meat inspection system and lifted the ban on Canadian beef imposed in 2003 because of bovine spongiform encephalopathy (BSE). "The Government of Canada continues to fight for farmers by opening and re-opening markets abroad," said Minister Ritz. "I'm pleased to see that Panama recognizes that Canada produces safe, high quality beef and pork products, and I encourage all countries in Latin America to open their doors." http://www.tax-news.com/asp/story/Canada_And_Panama_Sign_Free_Trade_Agreement_xxxx38445.html

Ocean Freight Market Heads into Choppy Waters
Ocean freight buyers are in a tight spot right now. On one hand, many carriers are saying that their current rates have sunk to levels that are simply unsustainable and are pushing for rate hikes as early as this month. But most shippers are likely working their way out of a recession which is forcing them to manage costs extremely well. And who's likely to pay more for a service that they've been using less of?

But at the same time, if the carriers' rates are, in fact, plunging to levels that are unsustainable and will force major hardship, then buyers are going to be left with a less competitive supply base when all is said and done. The solution to this conundrum has to be a win-win total cost reduction strategy that benefits carriers, shippers and end-customers alike.

Demand for ocean container shipping is down—way down—and carriers have seen rates plunge to levels that are unsustainable. "It is a pretty unprecedented situation—demand is weak globally on all trade lanes," said Neil Dekker, with London-based shipping consultancy Drewry Shipping in a recent Reuters report. "It has particularly hit the East-West trade lanes."

Shipping giant A.P. Moeller-Maersk forecasted that cargo volumes may drop more than 10% this year and show no growth in 2010 as the industry suffers a "completely unprecedented" decline, according to Eivind Kolding, CEO of the company's Maersk Line container unit. Kolding said current container freight rates are at levels not seen since the 1990s and that "Getting lower down from this point will actually mean you have to pay the customer to take his business."

A survey by Paris-headquartered market intelligence provider Alphaliner showed first quarter revenues of 11 of the main container shipping groups dropped 35% in the first quarter vs. a year ago. That slumping demand has driven rates in the Asia to U.S. lanes so low that they are unsustainable.

"There's going to be some fall-out," said Dekker. "There is no way that all companies can continue with those sorts of losses."

In an effort to avoid catastrophic consequences, the Transpacific Stabilization Agreement carrier group pushed a $500 rate increase for each 40-foot container being carried from Asia to the U.S. that reportedly goes into effect this month. The carrier group said the price increase came about because "average rate levels achieved in the latest round of service contract negotiations are not sustainable" over the next contract term.

"The eastbound transpacific trade lane has been driven by panic, and panic is difficult to stop once it has begun," said W.W. Lee, CEO for Container Liner Business at Hanjin Shipping, in TSA's announcement. "With 2009–10 contracting nearly completed, lines have had a chance to assess the damage. From an industrywide point of view the damage is serious, and if current rates are extended out over 12 months, it is likely that the trade will encounter significant financial challenges as well as basic service sustainability issues going forward." The rate increase applies to all commodities and all U.S. destinations served by the 14 lines under the TSA.

The TSA pushed a prior price increase in April but according to market sources that hike did not stick. And according to a report from Drewry Shipping Consultants, carriers are still in no position to increase rates and the negotiating process for East-West between trade routes between shippers and carriers has not gone well. Drewry forecasts a 29.5% reduction in all-in rates on this route for 2009. According to Drewry, carriers need to invest "more effort in forging good relationships and to treat the negotiating process with more care." http://www.purchasing.com/article/327453-Ocean_freight_market_heads_into_choppy_waters.php

Report Predicts Long Term Logistics Recovery
New figures published in Transport Intelligence's latest report, Global Freight Forwarding 2009, show the extent to which the freight forwarding market has shrunk in the first six months of 2009.

The air freight forwarding market contracted by 28% and the sea freight forwarding fared even worse with a 32% drop. The rapid reduction is placed into context by the fact that the air and sea freight markets actually grew in 2008 by 2.7% and 3.2% respectively fuelled by economic growth in the first part of the year and high fuel surcharges.

Although the crisis affecting the market is a global phenomenon, some regions performed much better than others. In the first half of 2009, for example, the Middle East air cargo market fell by just 3% whilst in the USA forwarders were faced with a 36% drop.

According to John Manners-Bell, Transport Intelligence's CEO, it will take several years before the industry recovers to previous levels. "There are signs that the industry has bottomed-out in terms of falling volumes. However indicators both within the market and in the wider economy are mixed. We believe that it will be at least 2012 before the market returns to its 2008 value."

The reduction in volumes has placed massive strain on forwarders' operations. Despite the asset-light nature of their business, none has been able to keep pace with the rapid downturn in volumes.

"The next six months of 2009 are critical to the future of the forwarding industry," warned Manners-Bell. "It is still to be seen which of the major freight forwarders has the best grip on the challenging market conditions. Those that get it wrong will be left behind when the recession finally ends." http://www.arabiansupplychain.com/article-2817-report_predicts_long_term_recovery_for_logistics/

Seaboard Deploys Larger Ship to New Orleans – Larger Ship Provides 50% Percent Greater Capacity for Caribbean Service
Responding to increased demand, Seaboard Marine will employ a larger ship in its weekly Port of New Orleans container service with Latin America. This week, Seaboard's 974-TEU Seaboard Caribe replaced the 640-TEU Heinrich J. The vessel will call the Port's Napoleon Avenue Container Terminal. Seaboard vessels call on the port each Wednesday. Other port calls for the service include St. Tomas, Guatemala, and Puerto Cortes, Honduras, with inland service to Managua, Nicaragua, and San Salvador, El Salvador.

"The New Orleans market continues to show strong potential to Central America," said Seaboard Marine President Edward Gonzales. "Employing the Seaboard Caribe, which has more than 50 percent greater capacity than the vessel it replaced, should allow us to broaden the amounts and types of cargoes carried."

"Seaboard Marine's expansion of service to New Orleans is great news for the entire maritime community," said Gary LaGrange, president and CEO of the Port of New Orleans. "During these difficult economic times, it demonstrates strong businesses can continue to grow services and expand market share. We applaud Seaboard for their commitment to the Crescent City." http://www.joc.com/node/412784

Peruvian Port of Ilo - One to Watch
Ilo port in southern Peru is among the fastest-growing container ports in Latin America, according to a report published by Latin Business Chronicle using statistics from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). Ilo marked 50% growth last year Ilo handled a total of 34,860 teu, a 50.7% increase compared with 2007, the report said. Other ports with strong growth were Arica in Chile (33.7%), Bolivar in Ecuador (31.3%), Caucedo in the Dominican Republic (28.3%) and Paita in Peru (27.4%), while Callao (Peru) and Cartagena (Colombia) also increased their container traffic by 17.7% and 17.3%, respectively. http://www.portstrategy.com/archive101/2009/september/news_extra/ilo_growth

Senate Bill to Restructure US Customs
Leaders of the Senate Finance Committee have put their stamp on a set of changes to the operational goals of the US Customs and Border Protection agency aimed at refocusing the agency’s efforts on trade enforcement and facilitation.

Chairman Max Baucus, D-Mont., and the ranking Republican, Sen. Charles Grassely, R-Iowa, filed the Customs Facilitation and Trade Enforcement Reauthorization Act of 2009 on August 13.

The bill makes a significant change in Customs’ senior management, and calls the agency to account for its activities including the Automated Commercial Environment, Customs-Trade Partnership Against Terrorism, import safety and intellectual property rights. The bill also would require Customs to develop joint strategies with Immigration and Customs Enforcement.

Responsibilities for Customs’ trade and security functions would be divided between two executives. The bill would create a principal deputy commissioner in charge of trade facilitation and enforcement matters, revenue, public communication and human resources. A deputy commissioner would be in charge of Customs’ security operations, security analysis and enforcement of non-trade laws. The bill would change the name of the Office of International Trade to the Office of Trade.

The Commercial Operations Advisory Committee (COAC) would become the Customs Commercial Operations Advisory Committee (CCOAC), which would oversee ICE as well as Customs operations.

Customs would be obligated to work with CCOAC, and the Trade Support Network to develop new benefits for participants in C-TPAT. Customs also would be required to set up a voluntary “Customs Facilitation Partnership Program” to provide benefits to companies that enter merchandise. The bill would authorize $300,000 for ICE in fiscal 2010, 2011 and 2012, but also require Customs to report to Congress how the advanced computer system will be completed by Sept. 30, 2012.

The bill also calls for an automated system for making drawback claims. Drawback refunds duties to importers who re-export goods. Marianne Rowden, president of the American Association of Exporters and Importers, said that improving drawback was one of the group’s highest priorities.

“We have worked out the principles for drawback modernization with CBP. We’ve had a deal with them for about five years,” Rowden said. Improvements in the system should encourage wider use of drawback, especially by medium- and small-sized companies. “We and the government have an interest in expanding the use of drawback, which has fallen in the past several years.” http://joc.com/node/412914

Britain Reclaims Control of Turks & Caicos
TURKS & CAICOS: Britain imposes direct rule on overseas U.K. territory LONDON (AP) _ Britain on Friday imposed direct rule on its former colony of Turks and Caicos following corruption claims against the territory's authorities.

The British government said it had suspended the government and legislature and put the London-appointed governor in direct charge of the islands about 500 miles southeast of Florida.

The islands' premier blasted the move as a "coup" that put Britain "on the wrong side of history." "Our country is being invaded and re-colonized by the United Kingdom, dismantling a duly elected government and legislature and replacing it with a one-man dictatorship," said Galmo Williams, who became premier after his predecessor, Michael Misick, resigned amid a corruption investigation. Following Misick's resignation in March, Britain said it planned to suspend parts of the islands' constitution and dissolve its Cabinet and assembly.

On Wednesday the Court of Appeal in London rejected Misick's legal challenge to the government's plans.

British Foreign Office Minister Chris Bryant said the suspension could last up to two years while governor Gordon Wetherell "put the Islands' affairs back in good order." He said elections for a new Turks and Caicos government would be held by July 2011. Wetherell denied the move amounted to a "British takeover."

"Public services will continue to be run by the people of the Turks and Caicos Islands, as indeed they should be," he said. "But I hope we can now begin to run them better." http://www.etaiwannews.com/etn/news_content.php?id=1032353&lang=eng_news

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