BNSF to Appeal Court Ruling on LA-LB Port Complex Rail Yard Proposal

bnsf

What began as a promising project proposal has now devolved into a game of legal tug-o-war between BNSF Railway and the California Superior Court. Just last week, the California court rejected BNSF’s proposal for a near-dock rail yard just north of the LA-LB terminal. The lower court ruled that the proposal’s environmental impact report was inadequate, thus delaying the project for at least another two years. BNSF has begun to appeal the court’s decision through the appellate court, stating that the court is overstepping the boundaries in which the California Environmental Quality Act (CEQA) can operate in. BNSF has stated that if the original ruling stands, they will have no choice but to abandon the $500 million investment altogether.

The goal of the project is to build a rail yard that is primarily used for transferring international containers to intermodal trains, which will significantly reduce truck congestion and traffic on the busiest, largest U.S. port complex. A project ten years in the making, the plan has always been to link this “Southern California International Gateway” to the intermodal Hobart yard located in downtown Los Angeles. BNSF believes that this project can be the precedent of many transportation infrastructure projects that will greatly reduce the traffic in Los Angeles and improve the efficiency of the port complex. In the same week of the ruling, the LA-LB port complex faced technical difficulties and shortages that resulted in delays at multiple terminals, lasting anywhere from two to five hours. Needless to say, if the rail yard can indeed reduce traffic and improve efficiency, it is something that everyone can benefit from.

Unbeknownst to most, the rejection of the proposal was not actually based on the environmental friendliness (or lack thereof) of the rail yard itself. Rather, because it will reduce the international cargo volume directed to the Hobart yard, there is reason to believe that a decrease in international cargo traffic will only be offset by an increase in domestic cargo traffic. And since the proposal fails to address the future use and impact of the Hobart yard, the ruling was given to prevent the possible increase in overall traffic and congestion.

From a business standpoint, BNSF is strongly motivated to realize this project so it can increase the volume of intermodal cargo which fuels its coal and oil business. Its main competitor, Union Pacific Railroad (UP), owns the Intermodal Container Transfer Facility that is just five miles off the terminal harbor. With a decline in business the past two years, BNSF is betting a lot on this proposal to maintain its competitiveness with UP. To defend its proposal, BNSF included a $100 million commitment to green technologies for the SCIG, such as electric cranes and use of solar energy.

Despite the support of the port and city of Los Angeles, the legal battle is a difficult one because of the complexities in the relationship between BNSF and the port. The project would directly benefit both the port of Long Beach and Los Angeles, so their support in the appeal lacks objectivity. The appeal’s success will hinge on the appellate court’s interpretation of the CEQA and whether or not the Hobart yard’s future use is under CEQA’s jurisdiction. Because of CEQA’s broadness and the uncertainty of the rail yard’s effect on traffic congestion, the appeal of the lower court’s ruling can still go either way.

 

Additional Information:

BNSF, Backers to Appeal Decision Delaying Near-Dock LA-LB Terminal (JOC)

BNSF to Appeal Ruling Blocking California Rail Yard (WSJ)

Port of L.A. and Railroad Appeal A Court Decision that Blocked A New Freight Yard in the Harbor (LA Times)

CEQA: The California Environmental Quality Act (California Natural Resources Agency)

Hapag-Lloyd and UASC Makes Big Splash with Merger Agreement

Hapag-Lloyd Wide

Source: www.momentumshipping.net

 

The presence of a major player in the freight forwarding industry continues to grow stronger as we enter the second half of 2016. Hapag-Lloyd, already an influential company in the industry, merged with the Dubai-based United Arab Shipping Company this Monday, creating the world’s fifth-largest container shipping line. The merger is expected to be finalized by the end of this year.

This merger will result in a fleet of “237 vessels that offers a total capacity of an estimated 1.6 million 20-foot-equivalent units, an annual transport volume of 10 million TEUs and a combined revenue of approximately $12 billion.” As owners and operators of UASC, Qatar and Saudi Arabia will own 14 and 10 percent of the merged carrier, respectively.

Rolf Habben Jansen, CEO of Hapag-Lloyd, expressed his enthusiasm for the merger, explaining the benefits that both parties will gain. For UASC, they will gain access to the immense market coverage and strong customer base that Hapag-Lloyd has built up. On the other hand, Hapag-Lloyd will receive new access to the ultra-large container vessels offered by UASC.

This merger comes at an important time for Hapag-Lloyd, which faced a net loss in the first quarter of this year and had to lower this year’s earnings outlook to a more conservative value. Recent recovery rates in July were described as “insufficient and unsustainable”, which leads many to believe that this merger is the big play that Hapag-Lloyd is betting on to generate a more profitable 2017.

Additionally, this will strengthen the competitiveness of the newly-formed THE Alliance, which also includes members “K” Line, MOL, NYK Line, and Orient Overseas Container Line. According to the June 29 Alphaliner, the merger will bolster the alliance’s market share on the trans-Pacific trade to approximately 33 percent and the market share on the Asia-Europe trade to 28 percent. With the recent legal issues the NYK Line is facing on charges of ro-ro price fixing, the alliance will need all the help it can get.

SOURCE: www.joc.com

Additional Information:

Hapag-Lloyd Warns on Profit, Seals UASC Merger Deal (Reuters)

Hapag-Lloyd Announces UASC Merger (The Maritime Executive)

Hapag-Lloyd Drops as Forecast Cut Overshadows UASC Merger Plan (Bloomberg)

A Letter to Our Clients: Port of Oakland to Implement Extended Gate Fee

Client Advisory:

Port of Oakland Update

SSA Terminals OICT Berth 55- 59: OICT TO IMPLEMENT EXTENDED GATE FEE

Due to the severe congestion, the Oakland International Container Terminal (OICT) has been sponsoring extended gates with the assistance of the Port of Oakland’s Transition Assistance Plan (TAP). The current program, expiring during the last week of June was operated free of charge. This will be replaced with a “fee based” program which is detailed below.

In order to continue to operate four extended gates weekly, effective June 27, 2016, OICT Is implementing a $30 per container transaction fee for all LOADED import (local delivery and IPI cargo) and export containers for both the day and night shifts.

  • This will not apply to empty transactions.
  • There is no expiry date for this fee.

Topocean has established an account for the payment of this fee on behalf of our clients per request. Should you have any question please contact your sales representative.

 

If any clients would like to pay the fee directly the links to the options are listed below.

Wire Transfer Instruction Form: https://b58.tideworks.com/WireTransferInstructionSSAOICTB58.xls

 

Advance Payment Notifications: https://b58.tideworks.com/OICTAdvancePaymentNotification.pdf

 

FOR ADDITIONAL INFORMATION, please visit:

http://www.joc.com/port-news/us-ports/port-oakland/oakland-poised-levy-fees-pay-night-gates_20160606.html

 

Sincerely,

Topocean Group

HMM Begins Talk with 2M Alliance, Possible Future Purchase

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Source: www.shippingwatch.com

Earlier this week, Hyundai Merchant Marine (HMM) sent out a newsletter to its customers explaining that it has begun talks with Maersk Line and Mediterranean Shipping Co. (MSC) to join the 2M alliance. With HMM cutting down their recent debt issues and successful meetings with shareholders, the Korea-based shipping company has shifted focus onto forming an alliance for the future.

HMM is currently a part of the G6 alliance, which also includes APL, Hapag-Lloyd, MOL, NYK Line and Orient Overseas Container Line. The alliance’s standing contract is set to expire in March 2017 but due to the recent alliance shifts in the industry, HMM must plan ahead to avoid the risk of being unattended in a world predicated on partnerships. Both the Maersk Line and MSC are part of the most powerful and profitable shipping companies in the world – joining the 2M alliance would help HMM cut costs and improve both service and ratings.

Lars Jensen, CEO and partner of SeaIntelligence Consulting, believes that Maersk Line might be considering buying HMM in the future. Maersk Line surprised many analysts recently with their profitable first quarter despite the slow-down in the industry. By accepting HMM into the alliance and taking over in the future, Maersk Line is looking to further the gap between itself and its competitors.

SOURCE: www.shippingwatch.com

Additional Information:

HMM in Talks to Join 2M Alliance (World Maritime News)

Analyst: Maersk Could End Up Buying HMM (Shipping Watch)

Drewry: HMM Joining 2M Suggests Hidden Agenda (World Maritime News)

Hyundai in Talks to Join 2M Alliance (JOC)

Topocean New Website & Features

Topocean Logo (High Res)

Welcome to Topocean’s revamped website!

As a brief introduction, we hope that this post can help you better navigate the new website layout and offer you Topocean’s full services at your fingertips.

HOME – The Home page grants access to learning more about the services we offer as well as the latest news in the freight forwarding and logistics industry. Shipment tracking can also be done directly through this page.

ABOUT – The About page tells a little about the history of Topocean and who we are as a company today. From this page, users can view “The Topocean Group – We Care” video, an animation that sums up our service and qualities perfectly.

SERVICES – The Services page lists all the services we offer. Here, you will see just how Topocean takes care of our clients from “A” to “Z”.

BRANCH DIRECTORIES – The Branch Directories page has contacts and addresses for ALL our branches. Whether you need to contact someone at your nearest local branch or reach a branch office across the world, this page will have the information you need.

SAILING SCHEDULES – The Sailing Schedules page is used exclusively for checking the collective schedules for all the different carriers.

CAREERS – The Careers page lists all our current job openings within the company. Those who are looking for a career in a dynamic industry within a global environment are encouraged to apply here.

NEWS – The News page is a quick glimpse into the current events taking place in the freight forward industry. By following along these weekly posts, users can learn more about the major shifts taking place within the industry.

CONTACT US – The Contact Us page is the best way for users to communicate with the Topocean team. Just leave your message and contact information, and we will get back to you as soon as possible!

QUICK LOGIN LINKS – Located at the top of each page are quick login links for easy access to the databases you need, such as Shipment Management, Vendor Access, ISF, and many more.

Thank you for taking the time to learn more about Topocean’s new website. We hope you enjoy the interface and that it can streamline and improve your experience with us. If you have any further questions about the website, feel free to contact us via the Contact Us page. Topocean would like to thank its entire staff for their continuing, excellent work and thank you for your unwavering support.