Ocean Fast Facts

Which Middle Eastern port ranks 7th in the world in terms of total container volume and carried over 10 million TEUs in 2007?

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AIT Employees Attend Annual Trans-Pacific Maritime Conference

Jay Walick, Kevin Krause and Hassan Bouche, AIT-ORD, recently attended the Trans-Pacific Maritime Conference hosted at the Westin Bonaventure Hotel and Suites in Los Angeles from March 2-3, 2009.

Launched in 2001 and now in its 9th year, the event is the most important annual gathering for senior executives from shippers, carriers, 3PLs, terminals, railroads, industrial real estate and other players in the trans-Pacific container market.

Held each year in early March as annual contract negotiations and peak season planning get under way, the event agenda is carefully planned to include the most knowledgeable and experienced speakers addressing the key challenges the industry will face in the coming year, particularly given the state of the global economy.

"I observed that the overall outlook by ocean industry leaders, carrier CEO's, port and terminal operators is 'cautious optimism," said Krause. "While the short-term outlooks for improvement in the global economy remains bleak in 2009, many leaders feel it will begin to see improvements in 2010."

Other topics covered at the conference included a market outlook for Trans-Pacific trade, the global energy situation and its impact on transport, strategies on taking costs out of the supply chain, and implementing green policies along the supply chain.

The multi-pronged $586 billion dollar stimulus plan in China, which addresses significant infrastructure improvements, including $87 billion in rail/intermodal spending and $58 billion in spend for airport infrastructure, created a significant buzz among attendees.

"This diverse spending plan should assist with job creation, not only in urban centers of China, but also to assist in the development of rural areas as well," said Krause. "Some economists also feel China will come out of the economic slump quicker than the United States, as the ability of the government in China to get the spending distributed to the appropriate areas will happen much more quickly due to less bureaucratic channels in the centralized Chinese government."

The "Clean Trucks" initiative at the ports of Los Angeles and Long Beach was one of the controversial topics addressed at the meeting. Requiring trucking companies to invest in their trucking fleets to ensure emission friendly equipment, many challenged the new mandates.

"Some independent trucking business owners find this discriminatory because they are being held responsible for fees paying to move containers in and out of the Ports of Los Angeles," Krause explains. "It was discussed during the conference that soon this 'green' initiative will not only apply at the Ports of Los Angeles and Long Beach, but may soon spread to airports and rail terminals within the Los Angeles basin and other ports throughout the nation."

Krause came away from this year's event with a renewed sense of optimism for the ocean industry in 2009 and beyond.

"It was among the most insightful Trans-Pacific Maritime meetings I have participated in over the past few years, despite the current economic climate," said Krause. "Industry leaders in attendance seem to be concerned about current global economic events, yet painted a more optimistic view on the outlook for Trans-Pacific trade than I had expected."

- by Christine Nicholson, corporate public relations coordinator

REMINDER: The Clean Truck Fee applies at the Port of Los Angeles / Long Beach

Effective February 18, 2009, marine container terminals began electronic gate access at the Ports of Los Angeles and Long Beach. Electronic gate access determines whether a truck entering the marine container terminal is operating under a valid port concession and allowed entry or if the truck is prohibited by the Clean Trucks Program's progressive truck ban. Trucks without a Radio Frequency Identification (RFID) tag, which identifies the vehicle as working under a valid port concessionaire, will not be allowed entry into the ports' container terminals.

As of February 18, 2009, the Ports of Long Beach and Los Angeles require that marine container terminal operators collect the Clean Trucks Fee (CTF). The $35/TEU fee will be assessed on every loaded container move performed by trucks that are not fully or partially exempt from the CTF. More information about the CTF and which trucks are exempt from the fee can be found here: http://www.portoflosangeles.org/CAAP/CTP_Fact_Sheet.pdf (under "Cargo Fee Exemption") or here: http://www.polb.com/civica/filebank/blobdload.asp?BlobID=5565.

In order to enter the ports' marine container terminals on and after February 18th, all trucks operating for a Licensed Motor Carrier (LMC) with a valid port concession are required to be registered in the Drayage Truck Registry (DTR), paid the $100/truck DTR registration fee, and obtained and mounted a working RFID tag. Trucks that do not meet these requirements will not be permitted into the ports' marine container terminals. The Licensed Motor Carrier is responsible for assuring that the information on each truck is correct in the DTR. If you have recently replaced a defective RFID tag, please make sure that the new RFID number is recorded in the DTR.

For more information on the Clean Trucks Program, please visit the following websites: http://www.portoflosangeles.org/cleantrucks or http://www.polb.com/cleantrucks.

ALERT: U.S. export containers - plan early and often!

It may come as a surprise to export customers, but several ocean carriers are reporting in late March that they are experiencing equipment shortages throughout their networks inside the United States. This shortage is due in part to the declined supply of import containers from Asia, which is often used to feed U.S. exports.

Key intermodal ramp and container yards are impacted by this shortage of equipment, which is not limited to special equipment such as refrigerated and flat rack/open top equipment. Dry standard equipment such as 20' standard, 40' standard and 40' high cube equipment may also be sparse in key intermodal markets such as Chicago, Minneapolis, Kansas City and St. Louis.

The shortages of equipment have not yet reached critical levels and vary by location and ocean carrier. It is recommended that you plan early when booking your export freight and allow ample time to ensure your export bookings can be covered; especially when multiple container shipments are required. Speak with your AIT representative to address your specific container needs.

The "greening" of the seas continues ...

On March 18, CMA CGM took delivery of the world's first container vessel designed to include an oil recovery system aimed to prevent marine pollution. The 11,400 TEU CMA CGM Andromeda contains a system of interlocked pipe that allows a rapid recovery of oil contained in the tanks without having to open a hole in the hull of the vessel. This system, called the "Fast Oil Recovery System," was initially designed for crude oil tankers and adapted to CMA CGM's department responsible for building new vessels.

The vessel also features several other new environmental technologies, including the latest generation compactor for extensive waste recycling on board in addition to other maritime architectural advancements that lead to the improvement of hydrodynamics.

Source: Journal of Commerce Online, March 17, 2009.

... and the "greening" of the seas continues on land too.

Often times within the shipping industry, one may hear joking about steel ocean containers being commandeered by locals in third-world countries and being utilized as living quarters, with many people living within one container. Well, while one may or may not consider this to be humorous, there is actually an emerging "green" concept where used ocean going containers are being utilized as quite efficient living quarters around the world.

Twenty-foot and forty-foot containers being converted to housing is becoming an eco trend, as these used containers are inexpensive and utilize little space for their size. Not only are these living quarters efficient, but they are becoming "trendy" - architects are designing them for personal and public housing. In the Netherlands, the world's largest container conversion to residential space for student housing is one example of the efficiency and "slick" design of existing inexpensive resources.

For an eco-friendly description of this trend and an inside look at this green housing trend, visit: http://www.thedailygreen.com/green-homes/latest/shipping-container-homes-460309?click=main_sr

U.S. export rates! General increases

Within the past few days, several carriers such as Maersk, MSC and Zim have begun announcing general rate increases (GRIs) for export trade lanes to Europe, the Mediterranean and Trans-Pacific. GRIs vary by carrier and trade lane as well as effective date, so please contact your AIT representative for questions relating to rates in your specific trade lanes.

Additionally, contract season for the Asia import trades is fast approaching. It is too early to tell what will happen with the rates into the 2009-2010 Trans-Pacific eastbound trade lane. Based on the discussions by ocean carrier leaders at the Trans-Pacific Maritime conference held in early March in Los Angeles, rates may continue to fall in the short term, an unprecedented concept at this annual event. However, carriers warn that this may be short term and carriers will most likely push for cost recovery in the next year to offset rising operational and infrastructure costs. Stay tuned!

STRIKE ALERT: France

Longshore workers in France are currently protesting container terminal privatization at the nation's seven state-controlled container terminals. At press time, no port delays have been reported at key ports such as Le Havre or Fos Sur Mere, but striking has occurred in the smaller ports of Marseilles and Nantes St. Nazaire. Delays may exist and become more widespread at the larger container ports, so should you have cargo moving between the United States and France, please contact your AIT representative for status updates as needed.

Source: Journal of Commerce, March 23, 2009

EU announces acceptable goods description guidelines

Customers should be advised of the new European Union (EU) acceptable goods descriptions that come into effect within the next year. As a reminder, it's always helpful to provide the most detailed commodity description for any piece of cargo when requesting rates or booking freight. This will help ensure the most accurate rate and also assists in movement of cargo through customs at both origin and destination.

Planning for conformance with the EU guidelines

Application of the Cargo Description Guidelines was going to become mandatory across the EU by December 31, 2010, in any event when ENS and EXS filings become mandatory.

Now, beginning on July 1, 2009, Dutch Customs will require that summary declarations for temporary storage and arrival manifests are in conformance with the Guidelines in order to avoid an automatically generated physical examination of the shipments. We expect that other EU Customs authorities may establish similar requirements.

Accordingly, ocean carriers may wish to bring the Guidelines to the attention of their shipper customers at their earliest convenience, so that the cargo descriptions they provide the ocean carriers for inclusion in their bills of lading - the basis for the ocean carriers' lodgment of manifests, summary declarations for temporary storage, ENS and EXS - will be in conformance with the Guidelines.

Application of the Guidelines, beginning on July 1, should produce a uniformly acceptable standard across EU ports and minimize the risk of delays to cargo because of shipping documents' cargo descriptions.

Ports of Los Angeles/Long Beach to eliminate one off-peak shift

Effective March 12, 2009, marine terminal operators at the Ports of Los Angeles and Long Beach announced they will each eliminate one Thursday or one Saturday PierPass off-peak shift per week due to declining cargo volume.

Marine terminal operators that close a Thursday off-peak gate will maintain a Saturday off-peak gate, and vice versa. The new schedule is effective the week of April 6. An updated off-peak schedule will be available on the PierPass website at www.pierpass-tmf.org.

With the dramatic drop in cargo volume amid the economic crisis, terminal operators must take measures to reduce their operational costs. Volume is down 32 percent at the ports of Los Angeles and Long Beach in the fourth quarter of 2008, compared to the same time period in 2007. The drop in cargo volume translates into reduced collection of the Traffic Mitigation Fee (TMF) charged on cargo container moves during peak daytime hours.

In addition to providing a financial incentive to move cargo during the off-peak shifts, the TMF is intended to cover the incremental cost of adding five shifts per week. Under the program, all international container terminals in the two ports established five new shifts per week (Monday through Thursday from 6 p.m. to 3 a.m. and Saturday from 8 a.m. to 6 p.m.). As an incentive to use the new off-peak shifts and to cover the added cost of those shifts, a Traffic Mitigation Fee ("TMF") is required for most cargo movement during peak hours (Monday through Friday, 3 a.m. to 6 p.m.). The program is administered by PierPass, a not-for-profit company created by marine terminal operators at the ports to address multi-terminal issues such as congestion, security and air quality.

For more information, please go to www.PierPass.org.

Central Asia: AIT can handle it!

AIT offers services for "unique" cargo to transshipment and countries in Asia that are typically difficult to reach, such as Ulaanbaatar, Bishkek Kyrgyzstan, Almaty, Dushanbe Tajikistan and Kabul.

While some of these areas or commodities to these areas may be restricted by the U.S. Government or AIT policy, each case can be reviewed independently, so please keep AIT Ocean Systems in mind when scheduling service to these countries. Should you have any questions, please contact your local AIT representative.

Power of Attorney

A written legal document by which one person (principal) authorizes another person (agent) to perform stated acts on the principal's behalf. For example; to enter into contracts, sign documents, sign checks, spend money, etc.

Source: Directory of International Trade, 7th Edition; 2006 Edward G. Hinkelman.

The importance of a Power of Attorney (POA) cannot be underestimated when it comes to importing or exporting freight. The execution (or signature) on a power of attorney between a principal and an agent is essential when a principal such as an importer authorizes an agent (such as a freight forwarder like AIT Worldwide Logistics) to perform business transactions on their behalf.

Common POA types include export power of attorney, import power of attorney and customs brokerage power of attorney. They can be customized to fit the individual requirements of the importer/exporter; however, basic power of attorney forms such as those previously mentioned are more common within the industry. Should you have questions regarding how powers of attorney forms work and whether or not your organization has the proper POA's signed for your particular business, please contact your local AIT representative.

The Parting "Wave"

On behalf AIT, thank you for your support during the winter of 2009. The entire ocean group looks forward to servicing your ocean needs as spring 2009 has already arrived!

Preview May 2009 AIT Ocean eNewsletter:
What's New? A summer preview.

If you have any questions or comments regarding the Ocean eNewsletter,
please contact Kevin Krause from the AIT Ocean Department.

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