Gemini-News

Gemini Shippers Group Attends SOLAS Weight Guidelines Session

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February 18th Washington DC

Ken O’Brien, Chief Operating Officer of Gemini Shippers Group, attended a listening session hosted by the Federal Maritime Commission.  It was held to discuss amendments to SOLAS Regulation VI-2 regarding cargo information and the verified gross mass of containers.

These regulations, which go into effect on July 1, 2016, require that shippers, regardless of who packed the container, verify and provide the container’s gross verified weight to the ocean carrier and terminal representative prior to it being loaded onto a ship.

Rear Admiral Paul F. Thomas, Assistant Commandant for Prevention Policy with the U.S. Coast Guard,  joined industry stakeholders to hear concerns and answer questions on the new rule and how it would be enforced in the United States.

The Admiral provided guidance on the enforcement powers of the U.S Coast Guard on this regulation and advised those in attendance that “Delayed implementation is not an option”.

Shippers and Carriers were advised to proceed quickly with preparation for the July 1 implementation.  One point of clarification gained at the meeting was further insight on how shippers could go about ascertaining the certified mass of the container.

As noted in many industry journals, shippers have two acceptable methods to measure the container weight.  Method one is to weigh the container once goods are loaded into the container at a truck scale prior to in-gate at the origin terminal.  The second method is to weigh the cargo that is going into the container, and then add the weight to the empty container Tare Weight.  Admiral Thomas assured shippers that the use of the Tare Weight stenciled on the container was acceptable and, under existing IMO guidelines, could be used under method two and that weighing of the empty container was not required.

While each shipper will have to determine the best and most cost effective method to use, our research indicates that method two can likely result in less disruption and cost in the supply chain, provided shippers can determine the exact weights of cargo being loaded at their origin factories.

Admiral Thomas also told shippers that the enforcement by US Coast Guard and maritime authorities in other countries will be on carriers and ports, and not on individual shippers.  Carriers and the ship’s “flag-state” are required to abide by the IMO rules and, given this mandate, the ability to delay these rules by any one country or flag is nonexistent. The admiral noted that his agency will not be holding shippers directly accountable, noting that only carriers and vessels are party to the SOLAS amendment, not shippers.  Thomas noted “There is no authority under SOLAS that requires shippers to do anything.” Carrier and terminals will however hold shippers accountable and not accept cargo without the compliant weight verification in place prior to loading.

With this in mind, we encourage Gemini members to work with their origin factories and vendors and consolidators to determine which method is best determining the gross container mass.

Geminin Shippers Group will continue to work with our carrier partners to determine their plans to capture and transmit weight information to terminal operators. We also emphasized to our carrier partners the need for detailed information on the timing of data transmission cutoffs.

Follow up questions on the listening session and container weight rules can be directed to Ken O’Brien at kobrien@geminishippers.com.

Align your freight portfolio to meet your business requirements

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By Sara Mayes, President and CEO, Gemini Shippers Group

As the head of a shippers’ association, I often get questions from supply chain leaders on how they should allocate their freight for the upcoming 2016 contracting season.  Like years past, shippers face a multitude of questions to consider when determining carrier allocations.

Carriers and Alliances:  How do I allocate cargo among the various carriers and alliances products?

Routing Options: How should we allocate between the US East and West Coast?  For cargo destined to the US East Coast, should we focus on strings that move via the Panama Canal or the Suez Canal?  Which ports should we use as gateway ports for inland intermodal cargo?  Should we book our shipment for door delivery or arrange last mile logistics ourselves?  Which underlying class I railroad is optimal for our inland cargo?  What do I do about Chassis?

Rate Structure:  Should we lock in long term rates or focus on short term spot pricing?

Service Requirements:  How important is transit time?  How important is customer service and documentation? What other value added services do I require?

Carriers vs. NVOCC or Shippers Association:  Should we procure direct contracts with Ocean carriers, or route freight via a freight intermediary, or a shippers’ association?

Price: What is a fair and reasonable price for the service levels I require?

In a normal year, supply chain managers face an enormous task of analyzing the almost endless permutations of origins – destinations – carriers – alliances – gateways – railroads – drayage companies and price options available to them.

This year shippers have a more sizable challenge driven by the high level of uncertainty facing ocean shipping.

Product uncertainty:  Pending M&A activity and the opening of the enlarged Panama Canal will most likely lead to significant product changes for many carriers and vessel alliances in 2016.

Price Uncertainty:  Significant overcapacity, and tepid global demand have introduced an extreme amount of rate volatility into the market in 2015.  Low ocean freight rates buoyed by recent low bunker prices have driven rates to recent historical lows, putting carriers’ ability to remain profitable at risk.

With all of these factors in play, my answer to shippers on how to allocate their cargo is simple: allocate cargo like you should allocate your investment portfolio – carefully, thoughtfully, diversified, and aligned with your tolerance for risk.

Here at Gemini Shippers, we help to educate our member companies on the changing permutations of choice and help them to align their carrier selections to create a value proposition that corresponds to service level and price goals required to successfully manage their supply chain.   With our diverse carrier options and no required commitment from members, we offer tremendous flexibility.

Understanding the freight ecosystem and your company’s business requirements before you allocate cargo in 2016 is key to a successful contracting program.

To find out how Gemini can make a difference for your company, visit us at www.geminishippers.com or call us at 212-947-3424.

 

NY- NJ Port Terminals hit by ILA Walkout

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Container terminals at the Port of New York and New Jersey were idled Friday morning when International Longshoremen’s Association workers walked off the job. The walkout began about 10am, and reportedly affected all port terminals. Trucking company dispatchers advised drivers to avoid joining queues outside terminal gates. There was no official confirmation of the cause of the walkout. However, multiple sources said it was due to ILA unhappiness with hiring rules of the Waterfront Commission of New York Harbor, which oversees port hiring. The ILA walkout came as New York-New Jersey terminals were struggling to catch up after a four-day weekend shutdown from Winter Storm Jonas, and a three- day holiday the previous weekend for the Martin Luther King Day observance.

What will 2016 Bring for Containerized Shipping?

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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.

 

 

 

 

Gemini Shippers Group Supports the Trans-Pacific Partnership Agreement

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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.

Committee Approves Surface Transportation Re authorization & Reform Act

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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

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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)