Gemini Shippers Group Updates on what is happening with the NJ/NYC ports due to the weather conditions across the area
By Sara Mayes, CEO and President Gemini Shippers Group, January 5, 2016
2016 promises to be another interesting year for shipping on the Transpacific Trade. Many shippers enter the year wondering where freight rates and capacity will head. 2015 proved a volatile year with carriers and shippers experiencing wild swings in price and service due to the continued delivery of new ULCC container ships, port congestion on the West Coast in the first half of the year and declining short term rates driven by overcapacity on most of the East-West trades. Despite modest growth in the Pacific, lines had little relief beyond the continued decline in bunker prices and the hope of possible future benefits due to industry consolidation brought about by the merger of Cosco and China Shipping and the purchase of APL by CMA.
So, as we enter the 2016 contracting season, many shippers are wondering what to expect.
While it’s probably a bit early to know for sure, a couple of trends seem to be emerging.
New ship deliveries will continue in 2016. Carriers continue to order and receive new and larger ships at a faster pace than demand growth. The current global order book of 3.8 million teu represents 20% of the existing container fleet. 60% of these new builds (around 300 ships) are scheduled to be delivered in 2016 and 2017.
Fuel prices remain at recent lows. Bunker prices start 2016 at a ten-year low of around $140 per ton which is 49% less that the 2014 average price. This lower price benefits carriers with lower operational costs, the savings of which are often passed on to shippers in lower rates. Lower bunker prices also affect carriers’ decisions to lay up tonnage, with lower bunker prices lowering the threshold at which carriers reach a voyage cash burn position (and hence often cancel sailings).
Short term rates will continue to be volatile. Carriers will keep using spot rate pricing as a tool to fill ships, but shippers will continue to face wild swings in price and capacity availability when relying on the spot market.
Carriers will attempt to improve long term contract rates in May 2016. In November, the Transpacific Stabilization Agreement, which represents 90% of the capacity in the Pacific trade, noted that they would seek minimum rate guidelines for the May 1 contracting season. Like past years, it is safe to assume that these guidelines will come under pressure as the early bird bid season commences after Lunar New Year.
Intermodal rates and drayage continue to be problematic for both shippers and carriers. Carriers continue to struggle to provide adequate pricing and service levels for inland locations and door delivery service their preference for port to port cargo and the uncertainty of container imbalances costs driven by a poor westbound market.
Alliance changes are not imminent but are on the horizon. The merger of Cosco and China Shipping and the eventual takeover of APL by CMA will lead to an alliance reshuffle in the future. While Cosco and China Shipping have not yet indicated where they will go, CMA has said that their future with APL lies in the O3 group, hence future change for the G6, O3 and CKYHE alliances is likely.
With modest demand growth expected in 2016, it looks like rates will remain under pressure as we enter into the 2016 contracting season; but, as we have learned from the past, in liner shipping, the only constant is change.
January 7, 2016 – Gemini Shippers Group today announced its support for the ratification for the Trans-Pacific Partnership (TPP) Free Trade Agreement.
The TPP agreement, if ratified, represents the most significant trade agreement proposed since NAFTA came into effect in 1994. The agreement brings together 12 countries with strong trading ties to the U.S. market. Combined, the Trans-Pacific Partnership (TPP) countries of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam represent 40% of global economic output and 800 million consumers. The TPP will create the world’s largest free trade zone representing 28.5 trillion dollars in combined GDP.
TPP is a comprehensive agreement which gives American businesses and consumers the benefit of a trade agreement crafted for the 21st century.
“Our members, who import fashion accessories and a variety of other products, will benefit from the agreement’s flexible rules of origin and immediate duty-free access,” stated Sara Mayes, Gemini’s President / CEO. “These provisions recognize the multi-country nature of modern companies’ global supply chains.”
The TPP agreement also addresses strong protection of American intellectual property (IP). Robust IP protection and enforcement provisions play a vital role for our members, and the U.S. economy, by driving economic growth, jobs, and competitiveness while protecting American innovation. The agreement will also facilitate improved trading conditions by enacting reforms to customs and border procedures, making them more efficient for our members. And finally, the TPP agreement also benefits our members by improving U.S. companies’ access to the Asia-Pacific region. The removal of trade barriers to U.S. exports, as well as the streamlining of non-tariff and regulatory barriers, will reverse the declining market share that U.S. goods represent in this fast growing market.
“The Trans-Pacific Partnership (TPP) Free Trade Agreement is a significant agreement,” concluded Mayes. “The TPP will benefit our members, their customers, and the entire U.S. economy. Gemini Shippers Group urges Congress to review and approve this critical agreement as soon as possible.”
Gemini Shippers Group, one of the largest shippers associations in the United States, has been serving its members for nearly 100 years. The group includes Gemini Shippers Association and the Fashion Accessories Shippers Association (FASA). Gemini offers member companies access to competitive global ocean freight contracts, long term rates and space allocations by signing global contracts with a wide variety of top tier ocean carriers. For more information on Gemini Shippers Group please contact us at:info@geminishippers.com or (212) 947-3424 or visit our website at www.geminishippers.com.
Washington, DC – The Transportation and Infrastructure Committee today unanimously approved the Surface Transportation Re authorization and Reform (STRR) Act of 2015 (H.R. 3763), a bipartisan, multi-year surface transportation bill to reauthorize and reform federal highway, transit, and highway safety programs.
The STRR Act helps improve the Nation’s surface transportation infrastructure, reforms programs and refocuses those programs on addressing national priorities, maintains a strong commitment to safety, and promotes innovation to make the system and programs work better. The proposal is fiscally responsible, provides greater flexibility and more certainty for states and local governments to address their priorities, and accelerates project delivery. The bill also extends the deadline for U.S. railroads to implement Positive Train Control technology.
“The Committee’s overwhelming approval of the STRR Act today is a positive step forward for our Nation’s transportation system and our economy,” said Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA). “I look forward to House action on the bill and going to conference with the Senate as soon as possible.”
Click here for more information on the STRR Act.
Click here for Chairman Shuster’s and Highways and Transit Subcommittee Chairman Sam Graves’ prepared statements from today’s markup of the STRR Act.
Truckers to strike four shipping companies at Southern California ports
LOS ANGELES, April 27 | By Steve Gorman
(Reuters) – Truckers who haul freight from the ports of Los Angeles and Long Beach will go on strike against four ground-shipment companies on Monday, a Teamsters union official said, in a move that could revive labor tension at the nation’s busiest cargo hub.
Delegations of drivers planned to notify the companies of their intent to strike at 6 a.m. Pacific time, with picket lines going up immediately at the companies’ truck yards, Teamsters spokeswoman Barb Maynard told Reuters.
The strikers also plan to picket marine terminals, rail yards and other locations where the companies dispatch trucks, Maynard said.
The truckers accuse the companies of wage theft by illegally misclassifying them as independent contractors, and the drivers demand to be treated instead as employees with the right to union representation.
Roughly 500 truckers in all work for the four companies – Pacific 9 Transportation, Intermodal Bridge Transport, Pacer Cartage, and a Pacer subsidiary, Harbor Rail Transport – with many of those drivers expected to take part in the strike, Maynard said.
The outcome of the dispute has implications for hundreds of companies and thousands of truckers in Southern California serving the twin ports, which handle 43 percent of containerized goods entering the United States.
About 500 port truckers have filed wage claims with state labor officials accusing their companies of misclassifying them as freelancers and charging them to lease the trucks they drive.
The state has ruled on at least 56 such claims so far, siding in every case with drivers in awarding them back wages and penalties, the Teamsters say.
Thousands more drivers have yet to file claims, and port trucking companies in California could be liable for wage and hour violations of up to nearly $1 billion each year, the labor-backed National Employment Law Project has estimated.
In January, truckers won a $2-million judgment against Pacer Cartage in a misclassification suit supporters say could bolster class-action litigation against other firms. But Pacer has said it would appeal the decision.
It was not immediately clear how disruptive Monday’s actions might be. A series of such strikes last year caused little disarray at the ports.
The action comes as West Coast port cargo traffic returns to normal after months of slowdowns over a dispute between shipping companies and the International Longshore and Warehouse Union. That dispute was resolved in February, with a five-year labor accord. (Reporting by Steve Gorman; Editing by Clarence Fernandez)
