Ocean Fast Facts

Ocean commerce in North America is not only handled by significant ports in the United States. Significant volumes of ocean imports and exports, especially those destined or originating in the Midwest and Ohio Valley, are handled via Canadian ports. This month's ocean fast facts begins with a question relating to the ports in Canada, which play a vital role in supporting the logistics supply chain to the Upper Tier of the Midwest:

Which Canadian port dates back to 1752 and in 1970 had the first common-user ocean container terminal?

Click here to see the answer!

Parking Spaces are Filling up ... For Ships!

The Journal of Commerce recently reported that as of February 2, 2009, nearly 800,000 TEU in container ship capacity had been idled. A total of 303 ships were reported to be idle, which represents 6.5 percent of the global container ship fleet, according to maritime database company AXS-Alphaliner. Below is a chart indicating those vessels idled by size. The most significantly impacted size of vessel is the small to mid-size range, which includes a large portion of vessels that service the trades to and from the United States.

Capacity at Idle	Ships
7,500 to 10,000 TEU	9
5,000 to 7,500 TEU	34
3,000 to 5,000 TEU	57
2,000 to 3,000 TEU	43
1,000 to 2,000 TEU	85
500 to 1,000 TEU	75

Source: Journal of Commerce; Volume 10, Issue 6; February 9, 2009

The Clean Truck Fee is in Effect: 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 whether or not the vehicle is 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), 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 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 and http://www.polb.com/cleantrucks.

CMA CGM Commences Service at the Port of Halifax

CMA CGM, the world's 3rd largest container shipping company, has announced plans to initiate a new service which includes a regular call at the Port of Halifax.

The fortnightly service will connect Canada and the USA with the Caribbean, Central America, South America and Australasia. In

particular, Canada, the US Midwest and the east coast of the US will be connected via CMA CGM's Kingston, Jamaica hub to a broad range of north-south and east-west trade routes.

Halifax is the only Canadian port of call on the new service. The inaugural call of the "Black Pearl" service to the Port of Halifax is scheduled for Monday, February 23. Container handling services for CMA CGM vessels will be provided by Halterm Container Terminal Limited.

Rate Watch! Intermodal Rates on the Rise

One of the nation's largest rail carriers, Union Pacific Corp. (UPRR), expects to raise their rail rates 5 to 6 percent this year over from 2008 levels. Even though volumes are down 19% on their system from one year ago, the carrier still intends to pass along the increase. This increase will most likely be passed along to ocean carriers during 2009.

Freight that may be impacted includes intermodal or multi-modal cargo (all rail or motor-rail combination cargo) traveling between the United States and key intermodal ramps spread out throughout the interior Midwest. The railroad has parked 400 locomotives and furloughed about 3,000 employees. It also announced it will reduce capital spending in 2009 to $2.8 billion from $3.1 billion in 2008.

Source: http://www.pacificshipper.com/news/article.asp?sid=33394<ype=multimodal

10+2 is here to stay

As earlier reported in previous editions of AIT eNewsletters, the United States Customs and Border Protection published the Importer Security Filing rule in late November. The interim rule, known as 10+2, took effect on January 26, 2009. Enforcement of the law will begin January 25, 2010. Should you have comments about the 10+2 required data elements, please contact your AIT representative.

Is your Cargo Sensitive to Moisture?
Keep your Cargo Dry while at Sea

Throughout the years, AIT has developed a customer base that often moves sensitive types of commodities. Outside of AIT's Perishable division, which specializes in transporting fresh, frozen and refrigerated commodities, the other divisions of AIT also handle an array of cargo requiring special handling, such as moisture-sensitive cargo.

Frequently on the high seas, cargoes moving within sea-going corrugated containers are subject to extreme temperature and humidity extremes while in transit. Ocean freight containers are sometimes offered in refrigerated (temperature controlled) or insulated containers, which help control and maintain temperature and humidity factors throughout the transit of freight. Refrigerated and insulated containers come at a premium price of standard dry containers which are not humidity or temperature controlled but can subject sensitive cargo to moisture and damage. These containers are considered "special equipment" and generally are not as readily available in the container fleets of ocean carriers.

For those commodities susceptible to moisture but due to low cargo value cannot justify the premium price or expense of "special" equipment, there are products in the market place that are less expensive than paying for special equipment when booking with an ocean carrier. Companies such as Multisorb Technologies of Buffalo, New York (www.multisorb.com), offer moisture reduction packs to stow in containers while in transit. These packs have the potential to reduce moisture damage while in transit and come at a fraction of the cost of booking special insulated equipment.

Importers of footwear or fashion accessories or other moisture-sensitive commodities might benefit from this product. Contact your AIT representative for questions to see how these types of products may save on your bottom line when moving commodities sensitive to moisture.

High Fees at the Suez Canal
Result in Diversion of Ships around Africa

Due to increasing costs for vessels transiting the Suez Canal, ocean carriers in the Grand Alliance consortia have announced they are re-routing ships in one of their eastbound Asia-Europe slings. Hapag-Lloyd, MSC, NYK and OOCL are re-routing all ships on the EU3 Asia-Europe service around Africa's Cape of Good Hope instead of transiting the Suez Canal. Not only does this action save the carriers on transit costs, which for a 9,000 TEU ship is approximately US $600,000 per transit, but the re-routing will also add 7 additional days to the transit time.

The ports impacted on this rotation are Southampton, Hamburg, Rotterdam, Port Kelang, Singapore, Shekou, Hong Kong, Ningbo and Shanghai. Earlier in February, other carriers including CMA CGM and Maersk also have re-routed Asia-Europe vessels around the Cape of Good Hope rather than transiting the Suez Canal. The decision of the carriers to re-route the vessels comes on the heels of the significant fall off in shipments between Asia and Europe. Carriers are expected to continue route alternatives to reduce costs while global containers volumes remain soft.

Source: Journal of Commerce Online, Feb 23, 2009

Advance Commercial Information (ACI)

Advance Commercial Information, or ACI, is a project of the Canada Border Services Agency. Once completely implemented, ACI requires that all commercial cargo entering Canada be electronically registered with the Agency. The project's aim is to improve border security and efficiency.

ACI came into effect April 19, 2004, and requires data on ship borne cargo to be transmitted to CBSA no later than 24 hours prior to the loading of the cargo. The data is available to Customs officials at each of Canada's major ports, and any anomalies can be investigated by mobile teams with secure, wireless access to the database. Sensors have also been installed to detect unusual radiation levels in cargo.

More information can be obtained by visiting the following link:
http://www.cbsa-asfc.gc.ca/prog/aci-ipec/menu-eng.html.

Essentially, ACI is the Canadian Equivalent of the United States Customs and Border Patrol Automated Manifest System (AMS). ACI is critical to helping ensure safety. The ultimate objective of this requirement allows the Canada Border Services Agency (CBSA) to effectively identify threats to the health, safety, and security of Canada prior to the arrival of cargo at Canada ports.

Source: http://en.wikipedia.org/wiki/Advance_Commercial_Information
http://www.cbsa-asfc.gc.ca/prog/aci-ipec/menu-eng.html

The Parting "Wave"

Who can believe that 2009 is passing so quickly and we're nearly through the 1st quarter? Management staff from AIT Ocean Systems will be participating in the annual Trans Pacific Maritime (TPM) Conference taking place on March 2 and 3 in Los Angeles. The focus of the conference is to participate in open forum discussions on the status of the Trans Pacific trade between the United States and Asia. We hope to share key market updates in the next AIT eNewsletter.

March is a month that does not contain significant closures or holidays around the world. Purim is in Israel on March 10. St. Patrick's Day is March 17, but not too many closures are expected around the world ... and the first day of spring is March 20. Happy Spring to all our customers, especially those in northern climates! Thank you for your support for the first quarter of 2009. See you in April.

Preview April 2009 AIT Ocean eNewsletter:
Some surprising Fast Facts and a look at what's happening in Trans Pacific Trade!

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

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