Monday, November 24, 2008

Unclaimed Cargo Clogs Indian Ports
Indian Times and World Trade Magazine

AHMEDABAD: The meltdown in the West has started to clog Indian ports. Container Freight Stations (CFS) at two of Gujarat's biggest ports, Kandla and Mundra, are spilling over with unwanted goods. With the world having gone upside down in the last six weeks, importers are shying away from claiming their cargo and many exporters are busy re-negotiating deals with overseas clients. As against an average of 300 uncleared containers at any point in time, there are over 2000 containers lying unclaimed in the 16 CFS in and around both the ports, since the clogging started one month back.

Conjestion at the Inland Container Depot (ICD) in Ahmedabad has increased by 70% in the past couple of weeks alone. There are around 1800 containers lying unclaimed here.

"We have around 1900 containers unclaimed, mostly of scrap. Importers dealing in scrap have not come to collect their cargo because of the crash in prices. Also, the rupee depreciation has resulted in increased landed cost of cargo," said a Kandla Port Trust (KPT) official. Prices of scrap in local markets have crashed by almost half -- from Rs 33 per kg to Rs 18 per kg.

The scene is slightly better with exporters. "Some consignments of pharma and chemical companies too are lying as these firms are trying to re-negotiate with their foreign clients," said an Ahmedabad-based clearing and forwarding agent. Industry sources say an average of 4500 containers are exported from one ICD every month. Jyotindra Kothari, president of Ahmedabad Customs Agents Association, says "unclaimed containers are shooting up." Market sources said that decision of the central government to impose 5% import duty on steel could ease the piling up of scrap imports.

Friday, November 21, 2008

VWP Travelers Need Electronic Authorization
News from Export News -- U. S. Department of Commerce

Have plans to host an international visitor next year? Beginning January 12, 2009, all
Visa Waiver Program (VWP) travelers will be required to have an electronic travel authorization
to board a carrier and enter the US. The Electronic System for Travel Authorization (ESTA) is a new requirement implemented by the 9/11 Act to determine the eligibility of VWP visitors to travel to the U.S. The program affects all 27 VWP countries. Travelers must log on to the secure, web-based ESTA system and provide basic biographical and travel information. Each application is then checked against law enforcement databases, including the terrorist
watch-list, lost and stolen passport records, and visa revocation/ refusal files, to determine if the traveler poses any security risk. Applications must be submitted at least 72 hours prior to travel. For details, see

Tuesday, November 11, 2008

Despite storms and economy, Gulf ro-ro still rolling
November 10, 2008 By Paul Rosynsky Break Bulk News

Given the economic crisis in the U.S. and a devastating hurricane that ripped through

Texas earlier this year, it would be easy to believe that most shipping industries along the Gulf Coast are struggling.

Consumers aren’t buying as much as they once were, and Hurricane Ike damaged a key port that shippers depend on to ship roll-on, roll-off goods to and from the Gulf Coast.

But representatives from companies that are focused on the ro-ro sector of the shipping industry said their business continues to grow despite the gloom and doom being felt throughout the U.S.

Infrastructure building booms in Latin America, the Middle East and Asia coupled with a quick recovery from Hurricane Ike at a key ro-ro port in Texas have many ro-ro carriers cautiously optimistic that they might escape the downslide.

“The ro-ro business, over the last five to six years, has grown,” said John Felitto, executive vice president and deputy head of region Americas for Wallenius Wilhelmsen Logistics. “And our customers still see growth.

“The trade between the United States and Latin America remains strong,” Felitto added.

That optimistic view has Wallenius Wilhelmsen looking to add a third vessel to its direct service between the Port of Galveston and Latin America. The company is also looking for a possible expansion of its direct service between the port and the Middle East, Felitto said.

Currently, Wallenius Wilhelmsen has two vessels on its Galveston-to-Latin America service making two calls a month at the port. Typically, southbound vessels call at Galveston; Veracruz, Mexico; Manzanillo, Panama; Cartagena, Colombia; Puerto Cabello, Venezuela; and Rio Grande, and Santos, Brazil.

The company focuses on high and heavy cargo such as manufacturing equipment and construction vehicles, but recently added cars as a cargo when it replaced its older vessels with pure car-truck vessels.

WWL also boosted its trade with the Middle East from Galveston, placing two vessels on the route in the middle of the year with plans to possibly add a third vessel next year, Felitto said.

Cargo in the Middle East trade is similar to the Latin American trade, Felitto said, with construction and manufacturing equipment filling vessels.

Sailings eastbound call at Galveston, Jacksonville, Savannah, Baltimore, Jeddah, Jebel Ali, Dammam and Kuwait.

In addition, WWL has 21 vessels currently being built that will be added to the global fleet over the next four years.

Along with Hoegh Autoliners and “K” Line, WWL has made Galveston its ro-ro hub on the Gulf Coast and was pleasantly surprised when the port was able to service vessels just eight days after Hurricane Ike devastated the region on Sept. 13.

“We expected a much larger disruption but we didn’t see it,” Felitto said. “The speed at which they recovered, as well as the personal commitment (of port personnel), was amazing.”

Cathi Lee, a senior import coordinator for Hoegh Autoliners, agreed. “Texas should be very proud of the people who work there,” she said.

Lee said Hoegh Autoliners thought it would have to redirect a vessel bound to Galveston right after the storm, but the port was able to service the vessel at its scheduled call.

“We still called, which I was shocked about,” Lee said.

Hoegh Autoliners began a new service into Galveston two years ago with direct service from Korea and Japan through the Panama Canal. The vessels usually call at Galveston once a month and occasionally twice a month, Lee said.

Lee said the route is focused on imports to the U.S. but exports the occasional project cargo load.

Like WWL, Hoegh’s ro-ro cargo is dependent on heavy machinery and manufacturing equipment, Lee said.

“The service has been absolutely steady. If we can get more ships going we would certainly have the cargo for it,” she said.

Steve Cernak, executive director for the Port of Galveston, said a decision several years ago to focus on ro-ro cargo is now paying dividends.

The port has seen yearly increases in the amount of ro-ro cargo it receives for nearly a decade and, despite the storm, it will probably see an increase this year as well, he said.

In 2007, the Port of Galveston handled 243,431 tons of ro-ro cargo. As of August 2008, the port has handled 212,067 tons, a pace that could see it handling more than 318,000 tons by the end of the year.

“It has become one of our major opportunities,” Cernak said. “It was an opportunity for Galveston. Containers were supplanting ro-ro in other ports, so we went after the ro-ro.”

The focus on ro-ro also helped the port reopen more quickly than expected since cranes and warehouses are usually not needed for such shipments.

Cernak said a little bit of luck and pre-storm planning helped the port see a quick recovery from Hurricane Ike.

The luck came because some of the port’s critical infrastructure needed to handle ro-ro was spared by Ike; the planning came as the port board of trustees pre-authorized Cernak to spend roughly $55 million in repair contracts.

So far, Cernak said the port has spent about $10 million for emergency repairs. He predicted all $55 million will be used before the port has finished restoring itself.

In addition, he said, this money should be reimbursed by insurance.

Overall, estimates for total hurricane damage at the port have ranged as high as $500 million, including damage to the berm around the port’s dredge materials area on Pelican Island and possible washouts and below-waterline damage in some sections of the port.

However, “we’re probably at 60 to 70 percent operational right now,” Cernak said by cell phone. “It was just a matter of doing it. There were certain areas of the port that escaped damage and that is where we serviced the vessels.”

While the port’s main administration building saw significant damage, Cernak said most bulkheads remained intact, allowing the port to begin servicing vessels within a week of the storm.

“The critical operations, we were spared damage at those facilities. I guess you can say we were lucky,” he said. “But, for ro-ro, it is really just uplands and the water just passed over it.”

Officials at the Port of Gulfport in Mississippi can only wish that their complete recovery from Hurricane Katrina could have been as smooth. The port is still wrangling with many challenges. However, more than three years after Katrina, the port is operating its ro-ro facilities at 100 percent, said representatives of Crowley Maritime Corp.

Crowley makes three vessel calls a month at Gulfport, filling its ro-ro vessels with containers, road construction equipment and manufacturing supplies and machinery. The vessels work on Crowley’s North American to Latin American trade route.

From Gulfport vessels call Santo Tomas, Guatemala; and Puerto Cortes, Honduras. Crowley also offers overland service from the two Central American ports to El Salvador and Nicaragua.

Charlie Dominguez, Crowley’s vice president of sales for Latin America, said a booming textile manufacturing industry in Central America and basic infrastructure improvements have helped keep the service at capacity in 2008.

Crowley has also benefited from large construction projects in Panama, including the widening of the Panama Canal and construction of an oil refinery.

“I do not see the impacts of the global catastrophe of economics in our business yet,” Dominguez said. “But it is too early to make that call.”

Dominguez said he fears the global financial crisis could slow the pace of Central America’s infrastructure improvements.

However, Crowley’s trade routes servicing Gulfport also rely on perishable foods which are shipped in refer containers on trailers. Dominguez said he doubts food goods will see a decline.

“A lot of the things we move are food. Our feeling is that consumers will not stop eating,” he said. “I also still see a continued investment in energy production.”

As for Crowley’s Gulf Coast hub, Dominguez said the company could not be happier with Gulfport, which has struggled to recover from Katrina. “The port is fully functional,” although, he said, some of the improvements have occurred more slowly than expected. “We just got back this year to three sailings a week.”

While the Gulf region’s larger ports such as Houston and Tampa still handle ro-ro cargoes, those industry executives interviewed said smaller ports will soon have a monopoly on the trade.

Once the Panama Canal is widened and containerized cargo begins to flood the Gulf Coast ports, executives predicted smaller ports such as Galveston will see increased demand for ro-ro cargo.

“For the larger port authorities, it is easier to make decisions towards container operations,” Felitto said. “It is more profitable.”

Yet, Felitto said, there are profits available if a port focuses on a niche trade such as ro-ro.

“Like everything else, we found ports and port authorities that are ready and willing to accommodate ro-ro,” he said.

Cernak said he foresees Galveston receiving more business in the future but said the port will give first right of refusal to its current customers who want to expand before it brings in a new shipping line.

“We still have land available — but if your existing customers want to grow you look at them first,” he said.