Shipping

Branding Sri Lanka a Regional Hub:

Asian Shippers' Council 2009 in Colombo

The Sri Lanka Shippers' Council is the apex body that represents the export/logistics- industry. The Council after lobbying for 15 years to host the Asian Shipper's Council - AGM, which is the biggest shippers' event in Asia, has been successful in getting this event to Colombo in August 2009 for the first time. The ASC is the largest component of the Global Shippers' Forum-(GSF) which constitutes the single largest body that represents the exporters, importers and service providers in the logistics and trade business around the world. The GSF event will be held in September in London after the Colombo meeting.

This achievement is a great success for Sri Lanka at this moment as Colombo was always rejected as a venue due to security considerations. However, the Chairman of the Singapore Shippers' Council who is the current Chairman of the ASC has now intimated to all 18 member countries that Sri Lanka is now ready and secure to have a conference of this nature and given us the opportunity to organise the event in Colombo.

The Sri Lanka Shippers' Council has taken an initiative to organize the Annual General Meeting in Colombo and one of our main objectives is to boost Sri Lanka's image and to brand the country as a Regional Hub using this event. This would be a great opportunity for the country to get international media attention for positive publicity for Sri Lanka. In this context, we seek the support of all media institutions in Sri Lanka to make this event successful.

Worldwide container traffic drops 10 percent

Trade at international ports is on track to drop more than 10 percent this year, one of the steepest declines ever, according to a new maritime industry report.

Cargo ships will carry 27 million fewer containers by year's end than they did in 2008 - a reduction roughly equivalent to all of the cargo containers handled by the five busiest U.S. seaports in a typical year, according to London-based Drewry Shipping Consultants' Container Forecaster Report.

A vessel carrying containers

Because the ports of Los Angeles and Long Beach are so busy - they handle more than 40 percent of U.S.-bound cargo container trade - the wharves here are disproportionately affected by the drop-off in imports and exports, Dekker said.

The ramifications for the Los Angeles and the Long Beach ports will be felt in some of the best-paying blue-collar jobs in the nation, as longshore workers lose hours at the docks, truckers have fewer containers to carry and railroad traffic ebbs. The Inland Empire, which has the nation's second-highest unemployment rate among urban areas because of the collapse of its warehouse and distribution system, will continue to suffer, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

"The forecasts for 2010 call only for a very moderate recovery in trade volume. This is a long-term problem. It will take several years for us to get back to the trade levels we saw in 2006 and 2007," Kyser said.

At the Port of Long Beach, the nation's second-busiest container port behind Los Angeles', trade volumes have been knocked back all the way to 2003 levels, according to spokesman Art Wong, wiping out all of the trade gains recorded during the boom years of 2004 through 2007. Similar results can be found at many of the major U.S. ports. "It's unprecedented for us to see this kind of slide. Is it going to flatten out? Are we at the bottom? We don't know yet," Wong said.

The continuing global recession has run so deep that it has caused Moody's Investors Service to downgrade its outlook to negative overall for the 53 U.S. ports whose credit ratings it tracks.

But there is a bright spot for Los Angeles and Long Beach, according to a new report by Moody's. Even though the two ports are spending millions on expensive environmental improvements and legal battles over their plans to clean up the air, the ports remain attractive to shippers, the report said.

"Los Angeles-Long Beach are the two most highly rated ports in the U.S. Two of the primary drivers are their strong financial situations and their competitive market positions," said Baye Larsen, an analyst and assistant vice president at Moody's.

"Both are a key advantage for those ports. They will be among the first to benefit when the recovery does come." Lori Kelman, spokeswoman for the Port of Los Angeles, said officials expect business to pick up toward the end of the year. "Our port is positioned well to embrace that recovery," Kelman said.

There are few indications that the turnaround will begin any time soon. The trade route that had been the most resilient in the face of the global recession - between Asia and Europe - has now succumbed to the downturn as well. So far this year, the last three years of growth in trade between Asia and Europe have been erased, Dekker said.

The result, he said, would be consolidation throughout the shipping business. "We believe that, consequently, the basic makeup of the industry will change as companies either go bust, amalgamate or shrink, shedding assets and personnel in the process," Dekker said. Many shipping lines are consolidating and sharing cargo routes with competitors to reduce costs.

The world's biggest shipping line, A.P. Moller-Maersk of Denmark, has a worldwide fleet that is bigger than the U.S. Navy. Maersk has been the Port of Los Angeles' biggest tenant in terms of cargo volumes. But this year it has sharply cut back its service in Los Angeles and to other ports to cut costs. Maersk Line, which operates 470 vessels and owns 1.9 million containers, says it lost $559 million in the first quarter of 2009.

Freight rates for transpacific trade, the amount that shipping lines can charge for a typical 40-foot container for cargo moving between Asia and the West Coast of the U.S., have plummeted to $920 from $1,400 at the beginning of the year, according to the Drewry report.- LATIMES.com

Korean owners plan fleet sale

The Korea Asset Management Company has devised a sale and lease-back scheme for Korean shipping companies facing a financial crunch.

The government linked financial institution has plans to purchase 62 ships through a specially created fund amounting to W4.3Trn ($3.3Bn).

Shipping sources have confirmed to Fairplay that applications for sale and leaseback of vessels have been received from 15 Korean shipping companies that include majors Hanjin Shipping, Hyundai Merchant Marine, STX Pan Ocean and Korea Line.

The sale price is still being negotiated though the first round of purchases is slated to be completed by end-July. Sources close to Hanjin Shipping told Fairplay that the company is planning to sell 16 ships.

According to market talk Hyundai Merchant Marine will sell eight vessels while STX Pan Ocean and Korea Line will sell six and three vessels respectively.

The AGM of Sri Lanka Freight Forwarders’ Association was held recently. Here the new office-bearers elected at the AGM. Seated from left: S. Mohanadas, Vice Chairman (Dart Global Logistics (Pvt) Ltd,. Ruwan Waidyaratne, Immediate Past Chairman (MIT Cargo (Pvt) Ltd) Dr. Priyath Wickrama, Chief Guest (Chairman, Sri Lanka Ports Authority) Tony de Livera, Chairman (Wings Logistics (Pvt) Ltd), Dushmantha Karannagoda, Treasurer (Marine Transport Services (Pvt) Ltd). And Irangika Siriwardena (SLFFA Secretariat) Standing from left: Tania Polonnowita (Hellmann Worldwide Logistics (Pvt) Ltd), Roshan Silva (CL Synergy (Pvt) Ltd), Shanaka Kumarathunga (John Keels Logistics Lanka (Pvt) Ltd), Prasansa Rodrigo (Speedmark Transportation Services (Pvt) Ltd),. Pandula Kuruppu (Freight Systems Logistics Lanka (Pvt) Ltd), Athula de Silva (Phoenix International Logistics Lanka (Pvt) Ltd) and Jagath Pathirane (Expolanka Freight (Pvt) Ltd and Romesh Wijenaike (Dart Express Lanka (Pvt) Ltd).