Cargo Delays Increase as Hurricane Harvey Moves Northeast

The Federal Maritime Commission (FMC) is offering cargo and commercial dispute assistance as ports and railroads around the gulf coast are still out of operation through at least the end of the week due to flooding.

Floodwaters are preventing industry operations from resuming as Harvey moves northeast into Louisiana.


Tropical Storm Harvey, now downgraded from hurricane status, continues to send a deluge of record rainfall to Texas and now Louisiana as it has made landfall west of Cameron, La., early Wednesday morning.

Ports and railroads continue to be closed as flood waters have yet to recede. Port Houston, Port Galveston and the Port of Corpus Christi are closed again Wednesday, but the U.S. Coast Guard has issued a “modified Zulu” condition as the storm heads northeast. Vessels with a draft up to 20 feet may operate within the Corpus Christi Inner Harbor under the modified condition. Surveys of all shipping channels are currently underway and ports are striving for a September 4 opening for all operations.

All BNSF and Union Pacific railroads, facilities and operations continue to be suspended in the gulf region as well, with no estimate on when they may reopen.

The port of New Orleans continues to operate under normal conditions as cargo and vessels are diverted to the Louisiana port. With the current path of the storm headed northeast, heavy rainfall and flash flooding could be a potential issue for roadways and rail lines in the Louisiana area.

The Federal Maritime Commission (FMC) has stated that the Consumer Affairs and Dispute Resolution Services (CADRS) can be of assistance in the aftermath of the storm. “While other federal agencies have primary jurisdiction and responsibility for relief and recovery efforts, the Commission through CADRS can facilitate solutions to commercial disagreements that might impede the resumption of cargo flow,” said the agency.

According to the Wall Street Journal, the Pentagon says it is preparing for a possible military response that would bring in troops, disaster gear and logistics equipment as long as ports, roads and railways continue to be blocked. Analysts have estimated the economic toll from the storm to reach the tens of billions of dollars.

ZIM Swings to Profit in Q2 2017

Looking ahead, ZIM’s primary focus will be on profitability, and the Israeli ocean carrier will focus on markets where it has a competitive advantage, said Eli Glickman, the carrier’s president and chief executive officer.

ZIM’s revenues for the second quarter of 2017 surged 21.9 percent year-over-year to $745.7 million amid higher box volumes.

 Israeli ocean carrier ZIM recorded a net profit of $2.3 million for the second quarter of 2017, compared to a net loss of $74.1 million for the second quarter of 2016, the company said Wednesday.

Eli Glickman, who took the helm as ZIM’s president and chief executive officer on July 1, told American Shipper the company was able to turn a profit due to cost reduction and efficiency, a change of the lines, and a change in market conditions.

Revenues for the quarter totaled $745.7 million, surging 21.9 percent year-over-year.

ZIM carried 659,000 TEUs during the quarter, up 6.7 percent from the second quarter of 2016, while the average freight rate per TEU stood at $1,007, up 16.3 percent.

For the first half of 2017, ZIM recorded a net loss of $4.1 million, compared to a net loss of $130.4 million for the corresponding 2016 period.

Revenues for the first half of 2017 reached $1.4 billion, surging 12.8 percent year-over-year, while volumes totaled 1.26 million TEUs, rising 5.2 percent.

Looking ahead, Glickman said ZIM’s primary focus will be on profitability, and the carrier will also focus on markets where it has a competitive advantage. “We focus on achieving profitability through efficiency, innovation, and above all, reliable and agile services to our customers,” he said.

ZIM, which has 4,200 employees, has over 70 lines and services, and calls 180 ports across the globe with a fleet of approximately 80 operated vessels.

Port of Virginia gets visit from biggest container ship to ever call on the East Coast


The CMA CGM Theodore Roosevelt visited the Virginia International Gateway in Norfolk, breaking the record for largest container ship ever to visit the Port of Virginia and the East Coast.

Back in May, the increasingly bustling Port of Virginia marked a milestone when the COSCO Development pulled in, then the largest container ship to ever call the port and the East Coast.

Since then, vessels even larger than the Development, which can carry the equivalent of 13,092 twenty-foot containers, have been a regular feature at the port. And on Monday, the CMA CGM Theodore Roosevelt set a new bar for big ships, docking its 1,200-foot-long bulk at the Virginia International Gateway in Norfolk.

The ship, which can carry the equivalent of 14,400 twenty-foot containers, is the biggest ship to ever call on the East Coast and made its way to Virginia from the Panama Canal. France-based CMA CGM is part of the Ocean Alliance, a group of ocean carriers that agree to contribute ships and share space. The Theodore Roosevelt is part of the alliance’s South Atlantic Express Service, a weekly service between Asia and the U.S. East Coast. The Port of Virginia is the first stop on the service.

“This is a notable step-up in size. In Virginia, the big-ship era started in May and we continue to see larger and larger vessels,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority in a statement. “It’s ships like this and those to follow that are driving our expansion,” he said.

The port is spending $670 million to expand the Virginia International Gateway and Norfolk International Terminals to handle the ever-bigger ships and cargo loads.

Last week, the port ordered four new ship-to-shore cranes, which will be the largest ever delivered to the East Coast, Reinhart said. The cranes, which can reach across a vessel that is 26 containers wide, are expected in April 2019.

“We anticipated needing this capacity for the ships that will be coming to Virginia 10 years from now. When that day comes, the Port of Virginia will be ready,” said Virginia Port Authority Board Chairman John G. Milliken.

Last month, the port set a record for its busiest July to date, with cargo volume up 7.5 percent compared to the same month last year. For the calendar year so far, volumes are up 8.2 percent compared to this time last year.

Hurricane Harvey Wreaks Havoc on Gulf Coast

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The storm made landfall as a category 4 before dropping down to a category 3, causing massive flooding and damage that has lead to service delays and temporary closures at the Port of Houston, BNSF railroad, area airports and oil refineries off the coast.


Hurricane Harvey struck Texas this past weekend as a category 4 storm, later dropping to a category 3, wreaking havoc on local supply chains.

The Port of Houston, as well as the Port of Galveston, announced it would be closed on Mon., August 28 “due to the continued threat of inclement weather.” Whether operations will resume on Tuesday has yet to be determined, both ports said.

Class I railroad BNSF has also been affected, primarily from flood waters caused by the sustained, heavy rains Harvey brought with it. Houston and areas throughout southeastern Texas are currently experiencing service disruptions as many interstates are closed.

BNSF’s Houston (Pearland) Intermodal and Automotive facilities are open, but the current road conditions are preventing any cargo from reaching the facilities, the railway said in a statement. As a result, train loading and unloading operations are currently suspended and “customers should expect continued delays on shipments scheduled to move through the area,” BNSF said.

Both Houston airports were also closed on Sunday and will remain as such for the time being, though several airlines have aided in evacuating those stranded due to flooding.

Oil refineries in the Gulf of Mexico shut down ahead of Hurricane Harvey, causing supply chain disruptions, as many fuel stations around the U.S. Gulf Coast region ran out of gasoline before the storm made landfall. The U.S. Environmental Protection Agency (EPA) loosened gasoline specifications to reduce shortages throughout the weekend, according to multiple sources.

More than 45 percent of the country’s refining capacity is along the U.S. Gulf Coast, and nearly a fifth of the nation’s crude is produced offshore in the Gulf of Mexico. Nearly 15 percent of U.S. fuel-making capacity, or 2 million barrels per day, were affected by the oil refinery shutdowns, according to a report from the Wall Street Journal.

“The recovery to this event is going to last many years to be able to help Texas and the people impacted by this event achieve a new normal,” said Federal Emergency Management Agency (FEMA) Director William “Brock” Long.

According to the Wall Street Journal, “Experts expect supply chains to rebound fairly quickly once roads and ports reopen, but the region is bracing for several more days of epic rains, pushing back any prospects for recovery.”


CMA CGM to Build World’s Largest Container Ships at Chinese Yards

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French shipping group CMA CGM plans to build nine of the world’s largest container ships at two Chinese shipyards, the China Daily newspaper reported on Wednesday.

Shanghai Waigaoqiao Shipbuilding Co confirmed that it and its sister yard Hudong-Zhonghua Shipbuilding (Group) Co, had received a letter of intent from CMA CGM for the ships, which would be capable of carrying 22,000 20-foot equivalent unit containers (TEU), the newspaper said.

The final order was subject to board approval from both sides, the newspaper said. Both yards are owned by state-run China State Shipbuilding Corporation.

CMA CGM did not immediately respond to a request for comment. Calls to Shanghai Waigaoqiao Shipbuilding and Hudong-Zhonghua Shipbuilding outside office hours were not immediately answered.

Should they be built, CMA CGM’s 22,000 TEU vessels will leapfrog the OOCL Hong Kong to take the crown of the world’s largest container ships. The OOCL Hong Kong has a carrying capacity of 21,413 TEU.

Global container shipping lines in recent years have been competing to build the biggest ships in order to gain economies of scale to slash shipping costs. However, such mega-ships are also being blamed for contributing to the overcapacity glut plaguing the container industry.