RESURGENCE IN ASIAN TRADE

Intra-Asian trade is set to pick up after the latest regional economic data showed a resurgence in exports in several key markets. In Hong Kong, exports and re-exports to ASEAN countries rose to nearly HK$7 billion a month at the end of last year after maintaining a figure of about $6 billion a month throughout the summer. This is still a long way from the $9.2 billion level seen in July 1997 before the Asian economic crisis hit. Trade in South Korea is also on the rise after the level of exports reached US$13 billion in December from about $11 billion in October. This is higher than the $12 billion reported in July 1997. Imports have also recovered from about US$7 billion in July to $9 billion in December, although they are well short of the $13 billion worth of imports seen in July 1997.
 

KWANG YANG THROUGHPUT TO INCREASE

Container throughput at the Korean port of Kwang Yang is predicted to reach 400,000 TEUs this year - a tenfold increase over last year's throughput. Volumes were low last year because of the late opening of the facility. Of the 400,000 TEUs, the authority expects the Korea Express terminal to handle 150,000, the Hanjin and Hyundai terminals to handle 100,000 each and the Cho Yang terminal to handle 50,000. The expected throughput is well below Kwang Yang's handling capacity of nearly 1 million TEUs. However, the authority expects that transportation and logistics improvements will see throughput rising to 700,000 TEUs next year and 900,000 TEUs by 2001.
 

GROWTH SURGE FOR REEFER LINES

Reefer operators face steady long-term growth despite a series of natural disasters last year which wrecked business from the lucrative fruit growing areas of Central and South America and Africa. Experts believe reefer capacity among containership operators will surge by 38,357 TEU - or almost 8 per cent - over the next two years. Leading lines, including OOCL, Maersk and Evergreen which already carry a large proportion of reefer cargos, all have reefer ships due for delivery by 2001. This has led to speculation that containership operators already ship more than 50 per cent of reefer cargos. Maersk is continuing to expand its existing reefer operations with new services linking Europe, Asia and North America with Oceania and South Africa. Similar improvements have been made to its Caribbean operations. Not to be outdone, specialist reefer ship companies are likely to add another 13 million square feet - equivalent to 26,000 TEU - of capacity this year as they take advantage of low newbuild prices in Asia. Overall, experts believe reefer operations will grow by up to 4 per cent a year over the long-term with Asia and central and eastern Europe being among the strongest in terms of growth markets.
 

THERMO KING SALES HEAT UP

Thermo King, one of the world's largest manufacturers of container refrigeration and generator units, saw a 40 per cent increase in production last year to more than 12,000 units. The firm said this was partly due to a massive expansion of its dealer network and parts warehouses over the past three years. In 1995, Thermo King had just three parts warehouses in ports around the world. Now there are 14. The number of dealers tops 400. The firm has also signed a technology and patent agreement with California-based TransFresh, which supplies controlled atmosphere systems, to incorporate the equipment into Thermo King units.
 

TIANJIN WANT'S TO BEAT LONG BEACH

China's Tianjin port is seeking Sea-Land's help to surpass the throughput of Long Beach, the largest US port. Speaking at the inauguration of Sea-Land (Tianjin) Container Terminal's (Slott) joint venture, vice mayor Wang Shuzu, was optimistic that Tianjin's 1.08m TEU throughput in 1998 could be raised to that of Long Beach, which was four times as large. Slott is operating one of the port's two berths, which has a 1,136 m quay and a designed annual capacity of 800,000 TEU. More cargo was expected to come from inland areas such as Chengdu. Slott was also working closely with shipping lines and freight forwarders and shippers to increase trade, according to William Flynn, Sea-Land Services vice president for Central Asia.
 

ZIM TO LAUNCH 2ND PACIFIC ROUTE

Long Beach will be one of the calls on a second transpacific service to be launched in May by Zim Israel Navigation Co, using six vessels. The precise schedule has not yet been fixed, but Shanghai, Pusan, Hong Kong, Vancouver and Oakland are expected to be included.
 

GROUP LAUNCHES JOINT SERVICE

MAERSK, Sea-land Service and P&O Nedlloyd are in a group of seven lines which have started a joint service linking the east coasts of North and South America. The new string provides two sailings a week - one with five ships and the other with six - and replaces a three times weekly service. The other partners in the venture are Columbus, Alianca, CSAV and Euroatlantic. Evergreen and Mediterranean Shipping are also believed to be in talks to merge their separate weekly services on the same route.
 

LOW COST BOX LEASING

US-based Transamerica Leasing has launched a new low cost container leasing service offering simplified procedures and involving older boxes, of between seven and ten years old.
 

ADEN TERMINAL SET TO OPEN

Aden Container Terminal, a joint venture project between Singapore port operator PSA Corporation (PSA) and Yemenivest, is set to start operations in March this year. PSA has the engineering contract for the construction of the terminal and the contract to operate it for 20 years. This is the first container terminal in the Yemeni port which PSA plans to develop into a major transhipment hub. It is equipped with two post panamax cranes.
 

ILA SEEKS MORE CONTRACT INFORMATION

The International Longshoremen's Association (ILA) wants the Federal Maritime Commission (FMC) to tighten new rules on the declaration of cargo movements. The regulations are being drawn up in accordance with the new Ocean Shipping Reform Act. The union wants the information to help it with collective bargaining arrangements and to ensure that carriers do not employ non-union labor. The ILA has succeeded in getting US legislators to amend the new law so that carriers must provide information on cargo movements. They are concerned with the way that confidentiality of contracts may affect the use of labor, and now want the FMC to plug possible holes in the new law so that labor interests are protected.
 

PIRACY ATTACKS "MORE VIOLENT"

Indonesia remained the hotspot for piracy with nearly one-third of all attacks against shipping worldwide last year taking place in its waters, according to the annual report of the piracy watchdog, the International Maritime Bureau (IMB). Indonesia, which the report described as the "highest risk area", saw some 59 actual and attempted piracy attacks out of a global total of 192. South-east Asia also accounted for over half of these 192 attacks with 104, including 15 in the Philippines, 11 in Malaysia, and nine Bangladesh. The total number of worldwide attacks dropped by 20 per cent compared to the total of 247 attacks in 1997 but concern has heightened over the increasingly violent nature of many of the piracy attacks. There have been several cases of whole crews being murdered in vessel hijacks in recent weeks. Some 14 per cent of the 467 reported attacks of violence involved the murder of crew members. The report also cautions that the figures for 1998 may yet rise as it expects to receive details of more incidents that happened over the last few months.
 

WHO IS "MR WONG"?

Mystery surrounds the identity of the alleged mastermind behind a piracy syndicate in Asian waters. The man was arrested in Batam, Indonesia, in December following the detention of a small tanker. The Pulau Mas was understood to be acting as a "mother ship" for launching attacks on vessels. Weapons and other paraphernalia useful in ship hijacks, including ships' stamps, were reportedly found on board the vessel. The arrest of a person known as "Mr Wong", but carrying the identification papers of 56-year-old Singaporean Chew Cheng Kiat, was reported in the local Indonesian press but has only become more widely known following its inclusion in the International Maritime Bureau's 1998 annual report, published last week. It now appears that the real Mr Chew was not involved but had lost his identity papers in Malaysia in 1997. According to the Indonesian press "Mr Wong" is accused of being involved in 21 hijacks over two years including those of the Petro Ranger, Suci, Atlanta, Pendopo and Plaju. The reports also make clear a strong connection with mainland China, the ultimate destination of most of the hijacked vessels.
 

TENYU CREW MURDERED?

Chinese authorities have found the missing Panamanian-flagged, general cargo vessel, Tenyu, using the name Sanei 1, in the port of Zhangjiagang. The original crew of two Koreans and 13 Chinese nationals have disappeared, raising fears they may have been murdered. The ship was carrying a US$1.9m cargo of aluminum ingots when it went missing. Pottengal Mukundan, director of the International Maritime Bureau, said: "We cannot ignore the possibility that they may have been killed and it is for this reason we feel it is important that the Chinese authorities conduct a full investigation before releasing the existing crew."
 

IMEC WARNS ON NEW ITF CONTRACTS

The International Maritime Employers' Committee has warned owners and managers to beware of amendments to International Transport Workers Federation (ITF) crew employment contracts for open register ships. It cautions that changes to the contract could impose a significant cost on employers and could create industrial relations problems on board. An IMEC spokesman said: "We urge all employers to read these contracts carefully, to reject clauses which are unreasonable and to make quite sure that they have insurance coverage for the liabilities they assume. ITF responded that owners voluntarily entered into the changed contracts. It said it was aware of IMEC's objections but that it would not accept that owners could pick and choose clauses in the agreement.
 

ITF SHIP IN CHILE SPAT

The International Transport Workers Federation campaign ship "Global Mariner" caused a stir during its recent calls in the Chilean ports of Valparaiso and San Antonio. In Valparaiso the ship was threatened with expulsion from national waters by the Chilean military and coastguard when it displayed a banner supporting local unions opposing the government's port reform policy. Eventually the authorities relented. In San Antonio the Global Mariner's crew were involved in direct action against a ship, the Cypriot-flag "Epic", whose owner had allegedly broken an agreement to pay ITF-level wages. The ITF ship launched a fast rescue craft which put a cordon of orange buoys around the Epic with the help of two fishing vessels. The master of the Epic agreed to pay the disputed amount of US$80,000 to the crew on arrival at the Chilean port of Iquique, also the Global Mariner's next destination.
 

MATSON BOOSTS RATES

A 2.5 percent rate increase has been filed by Matson Navigation Company in its U.S. Pacific Coast - Hawaii Service, effective February 14, 1999. According to the company, the increase will help offset rises in operating costs and support ongoing investments in the company's fleet, terminal and shoreside operations. Container equipment purchases in 1998 and the coming year will total $28 million. Fleet improvement projects include the $11 million purchase and modification of the S.S. Lurline; modification work will increase the vessel's 40-foot capacity. In addition, investments in information systems will total $10.8 million, much of which is allocated to Y2K issues. The most significant rise in operating costs pertains to the implementation of a three-year ILWU contract on the West Coast, which commenced in 1996. Implementation of this contract has added over 16 percent to Matson's West Coast labor costs. Matson's last across-the-board rate increase was a 3.5 percent increase in February 1997. Earlier this year, Matson placed two Hawaii Service vessels in a reserve status, in an effort to reduce costs and better match cargo demand with vessel capacity. This initiative will result in savings in operating costs, while still allowing Matson to provide the most frequent and reliable service, with 156 Hawaii round-trip voyages per year. Matson Navigation Company is a wholly owned subsidiary of Alexander & Baldwin, Inc. of Honolulu.
 

TMM-CP SHIPS DEAL FINALIZED

Transportación Maritima Mexicana, S.A. de C.V. and CP Ships, part of Canadian Pacific, last week signed an agreement finalizing the formation of their 50-50 joint venture, Americana Ships. Americana Ships consists of the CP Ships businesses Lykes Lines, Ivaran Lines and Contship Med - Gulf, plus all TMM's liner shipping interests, including Linea Mexicana, Tecomar and TMM's majority participations in Transportación Maritima Grancolombiana, Compañia Trasatlantica Española and the economic interest in TMM's Pacific joint venture with APL.
 

PORT SEATTLE INKS 13% ASIAN INCREASE

For the first time in nearly two years, exports through the Port of Seattle posted a healthy increase, according to Steve Sewell, managing director of the port's marine division. In October, exports to Asia rose 13 percent to 37,716 full TEUs (twenty-foot equivalent container units) from 33,248 full TEUs during the same period last year. Imports from Asia rose 13 percent to 57,377 TEUs from last year's 50,619 TEUs. October was the first month since February 1997 that the port has seen an increase in exports to Asia crossing its docks, Mr. Sewell said.