Ocean Fast Facts

Which Taiwanese port handled a combined import / export total of 2,055,258 TEUs in 2008 and is the country's second largest port in terms of container volume?

Taipei
Keelung
Kaohsiung
Tianjin

Click here to see the answer!

What to Expect for 2009 Contract Season?
It may be too early to tell

The Trans Pacific eastbound service contract season is rapidly approaching and contracts are again expected to be finalized in late June 2009. Up through 2007, ocean carrier contracts in the Trans Pacific eastbound trade to the United States were negotiated and finalized by May 1 of every calendar year. In 2008, most carriers extended contracts an additional two months and a similar scenario will most likely be the case in 2009.

Furthermore, the recent global market fluctuations and glut of container ships sitting idle have cast doubts on just how the market will adjust for the 2009 contract season; it's just too early to make a fair assessment of where the rates and fuel will land once all is said and done come July 1 when all contracts are scheduled to be finalized for the 2009 peak shipping season. The factors to watch this contract season are:

Will carriers continue to offer floating BAF (bunker adjustment factor)? Most likely, the carriers will stick to this formula, especially considering the volatility of oil prices in the latter part of 2008.

Will there be further consolidation of carriers in 2009? This nagging question has plagued the industry since 2005. 2009 will most likely be no different and there is concern with recent layoffs by carriers APL and Evergreen that further consolidation of the ocean lines will be necessary to help stabilize capacity and rates. Be on the lookout for mergers or acquisitions of ocean carriers throughout 2009 as carriers consider options to survive and flourish under the current challenging economic situation.

Will the US dollar continue to strengthen against the EURO and other Asian currencies? The further strengthening of the dollar versus foreign currencies would most assuredly assist spur US export growth in 2009 but are overseas markets strong enough to purchase US goods to sustain and fill ships on the critically important export trade lanes to Europe and Asia? This will be a crucial factor to watch in the first two quarters of 2009.

2009 will remain a challenging year for the ocean carriers, but 2009 may be even more challenging for the customers (importers/exporters), NVOCC and freight forwarders. Ocean carriers still face high operating and infrastructure costs and will attempt to pass those along to customers in the form of rate increases. Ocean rates in 2009 may already be at their lowest levels and importers/exporters seeking competitive rates should seek to review their ocean rate levels early in the year, as rates may increase once contract season approaches.

Clean Truck Fee: UPDATE!

Effective February 18, 2009, marine container terminals will begin electronic gate access at the Ports of Los Angeles and Long Beach. Electronic gate access will determine 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.

Also beginning on February 18, 2009, the Ports of Long Beach and Los Angeles will require marine container terminal operators to 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 at http://www.portoflosangeles.org/CAAP/CTP_Fact_Sheet.pdf (under "Cargo Fee Exemption") and 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), have paid the $100/truck DTR registration fee, and have 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 ensuring 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 and/or http://www.polb.com/cleantrucks.

The Port of Taipei plans expansion

The Journal of Commerce reported on January 16, 2009 that the Port of Taipei, Taiwan is planning a $558-million expansion. The expansion will occur over a period of eight years, with the objective of creating an alternative to existing major ports since trade with China is expected to boom. The expansion is anticipated to increase the port's profile but will not result in growth that will surpass Taiwan's leading Port of Kaohsiung. As mentioned previously, the Port of Kaohsiung handles approximately 10 million TEUs per year, and second-ranked Keelung handles about 2 million TEUs. The three-phase expansion of the port involves a new 119 acre container terminal worth about $60 billion US, a 304 acre offshore storage zone and a 304 acre $340 million container terminal.

Part of the port expansion of Taipei is driven by trade with China and the project comes on the heels of recently reopened direct shipping links between China and Taiwan for the first time in six decades. Currently, the port sees about 10 million metric revenue tons of cargo per year. Port officials said they could not estimate the capacity after the expansion is complete. Finally, three of Taiwan's top shipping firms, Yang Ming Marine, Evergreen Marine and Wan Hai Lines, will open operations at the existing port of Taipei. Most lines currently operate regularly from the nearby port of Keelung.

To mark the historical significance of the Direct Shipping Links agreement recently signed between the authorities on both sides of the Taiwan Strait, Evergreen Marine has launched a new North China-Taiwan (HBT) service. This new HBT service links Kaohsiung with Xingang, Dalian and Qingdao. Evergreen advised the direct link will reduce time and costs for carriers and shippers.

Port Congestion Watch - Dar es Salaam, Tanzania

Yet another sign that third world countries are emerging as important locations for international trade, congestion at Tanzania's port of Dar es Salaam has reached the stage where the country's President, Jakaya Kikwete, has issued an order that any containers not collected from Tanzania International Container Terminal Services (TICTS) within 21 days are to be auctioned off.

According to local media reports, the Tanzania Revenue Authority (TRA) has been directed to extend its operational hours to 24/7 to speed up the documentation process. Furthermore, the TRA and the Tanzania Port Authority (TPA) have also been instructed that all containers offloaded from ships must now be transported directly to Inland Container Depots - the Kurasini Inland Terminal (1.6 km from TICTS) and the Ubungo Inland Container Depot (16 km away) - with the costs being treated as the cost of clearing cargo from the port.

Other efforts to clear the congestion include locating more space outside the port of Dar es Salaam to accommodate vehicles awaiting clearance, and the suggestion that TICTS speed up its services by buying more equipment for offloading containers.

The Port of Dar es Salaam also became a viable location for increasing regional transshipment volumes, which grew from 2,194 TEU in 1999 to 56,249 TEU in 2004 - an increase of more than 2,500%.

The surge of container cargo was attributed to Tanzania's GDP growth, which averaged at 5.8% per year, the high economic growth of neighboring landlocked countries and the resulting increased trade with Asia and the Middle East, and the improved efficiency of TICTS which attracted global shipping lines to increasingly use Dar es Salaam for transshipment traffic and as a gateway to markets in neighboring countries.

By 2004, TICTS had exceeded the designed terminal capacity of 250,000 TEU and started running out of container stacking space.

Nordana Line expands service to Libya -- adds calls
to the port of Misurata

Beginning with the MS Silkeborg, the port of Misurata will be called on all sailings to Libya with a frequency of seventeen - eighteen days. The Silkeborg will load in Houston on January 31st, Jacksonville on February 5th, Baltimore on February 8th, and is scheduled to arrive at Misurata on February 26th.

Nordana has operated regular ro/ro and breakbulk service from the US into North Africa for more than fifty years, and was the first carrier to return with regular direct service when trade relations re-opened between the US and Libya in 2004 after a break of almost twenty years.

Nordana also serves the Libyan ports of Benghazi, Marsa El Brega and Tripoli.

In the US, Nordana transports ro/ro, breakbulk, heavylift and oversize cargo, as well as containers, from Houston, Jacksonville and Baltimore. Regular service is provided to Algeria, Egypt, Turkey, Spain and Italy before the vessels return to Houston via Venezuela, St Domingo, Guatemala and Mexico.

Security Watch: Ships from Venezuela receiving additional attention from the U.S. Coast Guard

The Journal of Commerce reported on January 20 that effective January 23, 2009, the U.S. Coast Guard is imposing conditions of entry on vessels arriving from Venezuela. Under the Maritime Transportation Security Act of 2002, Homeland Security can impose conditions of entry for vessels arriving from ports that are not maintaining effective anti-terrorism measures. Ships that visited ports in Venezuela during their last five port calls must, among other actions, report security measures to the Coast Guard; post guards at vessel access points, and implement measures per the ship's security plan equivalent to Security Level 2. Vessels are also subject to inspection by the Coast Guard, which may require armed private security guards while the ship is in U.S. ports. This may impact shipments bound to and from Venezuela, so please plan accordingly for possible delays in the event you have inbound cargo from Venezuela.

Rail strike could threaten German container traffic

Deutsche Bahn, Europe's biggest rail freight carrier, risks strikes over a new wage contract within weeks that would impact ocean container traffic at Hamburg and Bremerhaven, Germany's top box hubs.

Germany's largest ports of Hamburg and Bremerhaven are expected to be impacted by strike action because around 30 percent of cargo through their ports is moved via rail. The dispute involves two main unions representing 130,000 rail workers, Transnet and GDBA, which have called for a 10-percent wage increase and limits on weekend and night shifts while Deutsche Bahn has reportedly offered around 3 percent. No official date of a strike has been announced, but the strike is expected to take hold around the 29th of January.

A Reminder and Update on 10+2

As earlier reported, the United States Customs and Border Protection will published the Importer Security Filing rule in late November. The interim rule, known as 10+2, has taken effect on Jan. 26, 2009 with complete enforcement of the law on January 25, 2010. There is a detailed description of the ruling and its corresponding requirements in the Compliance section of this month's edition of the AIT Customer Newsletter.

February Holiday Reminder

There are several international holidays in February to be aware of in order to ensure the smooth flow of your cargo.

OK, so offices in the following countries may not be closed during these holidays ... and freight may move without interruption....but here are a few fun holidays to keep in mind while your freight may be on the high seas ....

Feb. 3 - Got beans? Go to Japan on February 3rd. Setsubun is the Bean-throwing Festival in Japan, and marks one of the most interesting February holidays of Japan... perhaps this is also the most "magical and fruitful" holidays of the year in Japan?

Feb. 5 - Celebrate Mexico's Constitution Day.

Feb. 6 - New Zealand Day in New Zealand is a day in a day, dressed up as a day. Celebrate the New Zealand way during New Zealand Day, as this party is one of New Zealand's favorite amongst February holidays.

Feb. 11 - Japan celebrates National Foundation Day.

Feb. 14 - Valentines Day in America and Europe is shared and is a celebration of the heart, which leads us to the other American holiday on February 14th: National Organ Donor Day.

February (third Monday) - President's Day in America helps America celebrate past accomplishments within the Presidency.

Also, as a reminder, carnival Season will start in late February, with the commencement of Mardi Gras on Tuesday, the 24th of February. Often times, countries in Latin America such as Brazil close for significant periods of time. Please be advised ahead of time and plan accordingly in order to avoid all freight delays.

Temporary Importation under Bond (TIB)

TIB is a U.S. customs term describing the temporary admission into the United States under a conditional bond for articles not imported for sale or for sale on approval. Certain classes of goods may be admitted into the United States without the payment of duty, under bond, for their exportation within one year from the date of importation when they are not imported for sale or for sale on approval.

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

To TIB or not TIB? That is the question.

One question to ask yourself as an importer is whether or not your goods may be imported under a TIB. A TIB may assist in limiting customs clearance and duty charges for cargo entering or exiting the United States when those goods are only expected to remain in the United States for a limited period of time. Much like the carnet is useful for importers/exporters of such commodities as commercial samples or exhibits for trade fairs, certain goods may be exempt from customs duties and tax and may qualify for importation under a TIB.

A few examples of such articles eligible for importation under a TIB include: articles to be repaired; articles imported for illustrators and photographers; professional equipment or articles intended for the use of testing, experimenting or review. Special procedural requirements apply when importing with a TIB. For more information on TIB, ask your AIT representative or visit: http://cbp.gov/linkhandler/cgov/newsroom/publications/trade/
temporaryimportationunderbond.ctt/temporaryimportationunderbond.doc

The Parting "Wave"

February is such a short month, yet the AIT Ocean Systems team has crammed this issue of the AIT eNewsletter with a bounty of news and information. Many accounts are actively requesting rates and planning for the 2009 peak season shipping season. Before you know it, March will be upon us!

As mentioned in an earlier newsletter, members from the AIT Ocean Systems team will be participating in the Trans-Pacific Maritime Meeting this forthcoming March in Los Angeles to experience a firsthand pulse on what is happening with inbound Asia trade. Hopefully, this year's conference will provide a positive outlook of the shipping season as peak approaches and 2010 forecasts appear on the horizon. Have a great February and thank you for your support of AIT!

Preview March 2009 AIT Ocean Newsletter:
The Springtime Shipping Season of 2009

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

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