Members of the United States Customs and Border Protection assigned to the Long Beach/Los Angeles port complex discovered and seized 1,932 karaoke machines worth nearly $1 million loaded with counterfeit memory chips.
CBP officers seized the karaoke machines on May 16, after CBP import specialists confirmed with the trademark holder that the memory cards bearing the SD (San Disk) logo were counterfeit. The shipment, with an estimated domestic value of $852,368 and an estimated manufacturer’s suggested retail price of $964,068, arrived via a cargo container originating in China. The karaoke machines were destroyed after San Disk confirmed the chips were counterfeit.
It is routine for CBP, citing privacy reasons, to not identify the specific terminal or facility within the port complex where a seizure occurs.
“CBP enforcement actions at Los Angeles/Long Beach seaport continue to yield outstanding results. We have an ongoing commitment that is focused towards intercepting shipments containing merchandise in violation of protected trademarks before they reach the consumer,” CBP Acting Director of Los Angeles Field Operations Carlos Martel said in a statement.
The importation of merchandise with counterfeit trademarks is prohibited, said the CBP statement. Importers violating these laws may be subject to civil penalties and/or criminal prosecution. CBP said it maintains "a vigilant stance in intercepting illegal shipments that introduce infringing merchandise into the country."
CBP’s strategic approach to intellectual property rights enforcement is multi-layered and includes seizing fake goods at ports of entry, pushing the border outward through audits of infringing importers and cooperation with international trading partners, and partnering with industry and other government agencies to enhance these efforts.
In fiscal year 2010, CBP at the Long Beach/Los Angeles port complex set a record-breaking pace with 863 trade seizures with an aggregate domestic value exceeding $34 million. This is a 42 percent increase in the number of seizures from fiscal year 2009.
Friday, June 3, 2011
Tuesday, May 31, 2011
NOL Sees Volumes Rise, Rates Drop
Singapore-based ocean carrier Neptune Orient Lines and its container shipping arm APL posted higher cargo volumes in its most recently reported four weeks period, while simultaneously reporting declining revenue per box moved.
In the four week April 9 to May 6 period, NOL carried 231,100 FEUs, up from 212,000 FEUs in the same period last year.
At the same time, the average revenue per FEU during the four-week period fell 4 percent to $2,549 per FEU, down from the $2,669 per FEU reported during the same period last year.
"The increase in volume was mainly due to higher volumes carried on the Intra-Asia and Asia-Europe trade lanes while the decline in average revenue per FEU was mainly due to lower rates in the Asia-Europe trade lane," said NOL in a statement.
Earlier in May, NOL released its first quarter 2011 results, posting a total net loss of $10 million compared to net loss of $98 million in first quarter 2010.
NOL subsidiary shipping arm APL reported first quarter 2011 revenue of $2.1 billion, a 15 percent increase over the same period a year ago. APL also posted $8 million in core EBIT loss compared to a $89 million core EBIT loss in the first quarter of 2010.
APL volume increased 764,000 FEUs during the first quarter, a 9 percent increase compared to the year-ago period.
While average APL revenue per FEU increased to $2,598 during the January to March first quarter 2011 – a 3 percent increase – the per FEU numbers remain well below the $2,669 per FEU reported during the April 9 to May 6 period last year.
“We lifted higher container volumes in the Asia-Europe and Intra-Asia trade lanes during the first quarter, and freight rates improved in the transpacific,” APL President Eng Aik Meng said in early May regarding the first quarter numbers. “But our emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices, which were 28 percent higher per metric ton in the first quarter of 2011 than they were in 2010.”
In the four week April 9 to May 6 period, NOL carried 231,100 FEUs, up from 212,000 FEUs in the same period last year.
At the same time, the average revenue per FEU during the four-week period fell 4 percent to $2,549 per FEU, down from the $2,669 per FEU reported during the same period last year.
"The increase in volume was mainly due to higher volumes carried on the Intra-Asia and Asia-Europe trade lanes while the decline in average revenue per FEU was mainly due to lower rates in the Asia-Europe trade lane," said NOL in a statement.
Earlier in May, NOL released its first quarter 2011 results, posting a total net loss of $10 million compared to net loss of $98 million in first quarter 2010.
NOL subsidiary shipping arm APL reported first quarter 2011 revenue of $2.1 billion, a 15 percent increase over the same period a year ago. APL also posted $8 million in core EBIT loss compared to a $89 million core EBIT loss in the first quarter of 2010.
APL volume increased 764,000 FEUs during the first quarter, a 9 percent increase compared to the year-ago period.
While average APL revenue per FEU increased to $2,598 during the January to March first quarter 2011 – a 3 percent increase – the per FEU numbers remain well below the $2,669 per FEU reported during the April 9 to May 6 period last year.
“We lifted higher container volumes in the Asia-Europe and Intra-Asia trade lanes during the first quarter, and freight rates improved in the transpacific,” APL President Eng Aik Meng said in early May regarding the first quarter numbers. “But our emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices, which were 28 percent higher per metric ton in the first quarter of 2011 than they were in 2010.”
Vancouver USA Port Receives $800K State Loan for Facility Upgrades
The Washington state Port of Vancouver has been awarded an $800,000 loan from the Washington State Community Economic Development Revitalization Board (CERB) to make improvements to an existing port facility that are necessary before the aluminum extrusion company, Sapa Profiles, Inc., locates at the port.
"This loan will allow us to make necessary building improvements to attract a major employer to the region, and help bring nearly 100 family-wage jobs to Clark County where unemployment is still hovering near 13 percent," Port of Vancouver Executive Director Larry Paulson said.
"Our private sector partner Sapa Profiles, Inc. has a proven track record of success with tremendous potential for growth and will be a valuable new business in Clark County and Washington State."
Port officials and Sapa are working toward a final lease agreement for the former Panasonic building, which has been vacant since the electronics manufacturing company shuttered the facility in 2008 and laid off more than 200 full time and temporary employees.
Total cost of the proposed renovations is $1.3 million and includes replacement of the building’s current asphalt floor with a reinforced concrete floor, as well as electrical and HVAC upgrades.
In addition to the $800,000 CERB loan, the port will provide $500,000 in matching funds to complete the improvements.
According to CERB, a projected $10.00 of private investment will be generated for every one dollar of CERB investment.
The private-sector investment by Sapa, which includes manufacturing equipment and additional facility upgrades, is anticipated to be more than $8 million over the firm's first 12 months of occupancy.
The Sapa facility, when completed, is expected to employ 100 full-time jobs with the anticipated median hourly wage of the new jobs exceeding the median hourly county wage by 11 percent
Sapa has 15 plants located in North America. The Port of Vancouver location will be the firm's first facility in Washington State.
"This loan will allow us to make necessary building improvements to attract a major employer to the region, and help bring nearly 100 family-wage jobs to Clark County where unemployment is still hovering near 13 percent," Port of Vancouver Executive Director Larry Paulson said.
"Our private sector partner Sapa Profiles, Inc. has a proven track record of success with tremendous potential for growth and will be a valuable new business in Clark County and Washington State."
Port officials and Sapa are working toward a final lease agreement for the former Panasonic building, which has been vacant since the electronics manufacturing company shuttered the facility in 2008 and laid off more than 200 full time and temporary employees.
Total cost of the proposed renovations is $1.3 million and includes replacement of the building’s current asphalt floor with a reinforced concrete floor, as well as electrical and HVAC upgrades.
In addition to the $800,000 CERB loan, the port will provide $500,000 in matching funds to complete the improvements.
According to CERB, a projected $10.00 of private investment will be generated for every one dollar of CERB investment.
The private-sector investment by Sapa, which includes manufacturing equipment and additional facility upgrades, is anticipated to be more than $8 million over the firm's first 12 months of occupancy.
The Sapa facility, when completed, is expected to employ 100 full-time jobs with the anticipated median hourly wage of the new jobs exceeding the median hourly county wage by 11 percent
Sapa has 15 plants located in North America. The Port of Vancouver location will be the firm's first facility in Washington State.
Long Beach Port's Outgoing Steinke Garners Further Accolades
Port of Long Beach Executive Director Richard Steinke continues to rack up prominent industry awards as he heads toward his recently announced retirement from the port after nearly 14 years at the helm of the second busiest container port in the nation.
On Thursday, Steinke was presented with the Marjorie M. Shostak Distinguished Service Award from the Foreign Trade Association of Southern California (FTASC) at the trade group's annual World Trade Week Luncheon in downtown Los Angeles.
The FTASC cited Steinke for "his leadership in the international trade industry and his accomplishments as chief of one of the largest seaports in the world.
"
Named after Marjorie M. Shostak – a prominent trade attorney, federal government advisor on trade issues and the first woman to serve (from 1956-1962) as an officer and director of the FTASC – the award is the penultimate accolade offered by the FTASC.
Two weeks ago, Steinke was also named as this year's recipient of the prestigious Connie Award by the non-profit Containerization & Intermodal Institute.
The Connie Award, to be presented to Steinke at a Sept. 21 ceremony in Long Beach, recognizes those who have had a significant influence on containerization in world trade and transportation.
"Richard Steinke established himself as an indispensable leader of the Port of Long Beach and the international transportation community," CII president Allen Clifford said. "His diligence, attention to detail and vision keep the port among the busiest in the world and among the most advanced for our imports and exports."
Earlier this month Steinke, the executive director of the Port of Long Beach for more than 13 years, announced that he would be retiring as of September 30 – ending a tenure that included guiding the port through one of the most successful periods of growth and development in its 100-year history.
Known as one of the most knowledgeable and respected port directors in the world, Steinke has been a prominent voice for the Long Beach port on both the national and international scene.
His announced departure came as a surprise to many, including elected officials, members of the industry, the Long Beach Board of Harbor Commissioners and the port staff – many of whom have never known another boss.
In Sacramento, State Senator Alan Lowenthal, who has faced off with the port many times on environmental issues, said he was very surprised to hear the news, but wished Steinke well.
"He led the Port of Long Beach through the transformation from a port that just cared about the bottom line to one that still wanted to support economic development but changed its vision to include the impacts upon the community and the reduction of those impacts" Lowenthal said of Steinke.
"I applaud him. I hope who ever follows him takes on this dual vision of both economic development and also environmental protection as the mantra for the future."
On Thursday, Steinke was presented with the Marjorie M. Shostak Distinguished Service Award from the Foreign Trade Association of Southern California (FTASC) at the trade group's annual World Trade Week Luncheon in downtown Los Angeles.
The FTASC cited Steinke for "his leadership in the international trade industry and his accomplishments as chief of one of the largest seaports in the world.
"
Named after Marjorie M. Shostak – a prominent trade attorney, federal government advisor on trade issues and the first woman to serve (from 1956-1962) as an officer and director of the FTASC – the award is the penultimate accolade offered by the FTASC.
Two weeks ago, Steinke was also named as this year's recipient of the prestigious Connie Award by the non-profit Containerization & Intermodal Institute.
The Connie Award, to be presented to Steinke at a Sept. 21 ceremony in Long Beach, recognizes those who have had a significant influence on containerization in world trade and transportation.
"Richard Steinke established himself as an indispensable leader of the Port of Long Beach and the international transportation community," CII president Allen Clifford said. "His diligence, attention to detail and vision keep the port among the busiest in the world and among the most advanced for our imports and exports."
Earlier this month Steinke, the executive director of the Port of Long Beach for more than 13 years, announced that he would be retiring as of September 30 – ending a tenure that included guiding the port through one of the most successful periods of growth and development in its 100-year history.
Known as one of the most knowledgeable and respected port directors in the world, Steinke has been a prominent voice for the Long Beach port on both the national and international scene.
His announced departure came as a surprise to many, including elected officials, members of the industry, the Long Beach Board of Harbor Commissioners and the port staff – many of whom have never known another boss.
In Sacramento, State Senator Alan Lowenthal, who has faced off with the port many times on environmental issues, said he was very surprised to hear the news, but wished Steinke well.
"He led the Port of Long Beach through the transformation from a port that just cared about the bottom line to one that still wanted to support economic development but changed its vision to include the impacts upon the community and the reduction of those impacts" Lowenthal said of Steinke.
"I applaud him. I hope who ever follows him takes on this dual vision of both economic development and also environmental protection as the mantra for the future."
Seattle Port Fined for Failing to File 42 Months of Lobbying Expenses
The Washington state Public Disclosure Commission has fined the Port of Seattle $3,750 for failing to timely file 18 quarterly reports detailing the port's publicly-funded lobbying of the state legislature.
Following a complaint filed in July 2010, the PDC began an investigation into the matter in February 2011.
The PDC found that the port, in response to the original complaint with the PDC, filed 23 quarterly lobbying reports on January 14. Of these, 18 reports covering from the start of April, 2006 through the end of September, 2010, were between 62 days and four years late under deadlines set forth in state law.
The 18 reports detailed reportable lobbying expenses by the port totaling $269,900. However, of this amount, the PDC said in it's ruling that $233,708 of the total unreported expenses "represented payments for lobbying services previously reported in a timely manner by the port's contracted lobbyist" in required monthly disclosure reports by the lobbyist to the PDC.
The PDC found that port failed to disclose a total of $36,192 in previously unreported lobbying expenses, including $33,801 for time spent lobbying by port employees, $1,500 for lobbying-related brochures and publications, and $891 in port employee lobbying-related travel costs.
The PDC cited the port for violating state law multiple times by failing to make the quarterly reports on time.
The port was fined $7,500 for the violations, of which half would be suspended if the port made on time quarterly reports for the next four years and paid the remaining $3,750 fine within 60 days of the PDC's May 18 ruling.
Port officials, according to the Seattle Times, called the PDC reporting problems a lapse in procedures.
Following a complaint filed in July 2010, the PDC began an investigation into the matter in February 2011.
The PDC found that the port, in response to the original complaint with the PDC, filed 23 quarterly lobbying reports on January 14. Of these, 18 reports covering from the start of April, 2006 through the end of September, 2010, were between 62 days and four years late under deadlines set forth in state law.
The 18 reports detailed reportable lobbying expenses by the port totaling $269,900. However, of this amount, the PDC said in it's ruling that $233,708 of the total unreported expenses "represented payments for lobbying services previously reported in a timely manner by the port's contracted lobbyist" in required monthly disclosure reports by the lobbyist to the PDC.
The PDC found that port failed to disclose a total of $36,192 in previously unreported lobbying expenses, including $33,801 for time spent lobbying by port employees, $1,500 for lobbying-related brochures and publications, and $891 in port employee lobbying-related travel costs.
The PDC cited the port for violating state law multiple times by failing to make the quarterly reports on time.
The port was fined $7,500 for the violations, of which half would be suspended if the port made on time quarterly reports for the next four years and paid the remaining $3,750 fine within 60 days of the PDC's May 18 ruling.
Port officials, according to the Seattle Times, called the PDC reporting problems a lapse in procedures.
Friday, May 27, 2011
German Shipbuilding: Exploring Growth Opportunities
By Eugene Gerden
The German shipbuilding industry is steadily recovering from the effects of the recession, which is reflected by the ever-growing number of orders, received by German shipyards, as well as recently announced ambitions of the German government and major local players to create conditions for the diversification of German shipbuilding.
Germany has the third largest merchant fleet in the world, and ranks first in containerships. Germany is also one of the leading international ship finance sites, and with a turnover of €85 billion, shipbuilding is a key industry in the German economy.
The storm has abated, but winds are still high. German shipbuilding has coped with the downturn in the wake of the financial and economic crisis remarkably well, avoiding the worst scenarios, however most of the analysts warn that in the absence of reforms the next crisis is only a matter of time.
Angela Merkel, Chancellor of Germany, commented, “Due to the crisis, global competition in the industry has become even more noticeable. The importance of shipbuilding for Germany is reflected by the fact that up to 90 percent of the European foreign trade is transported by sea.”
At the same time Werner Lüken, chairman of the German Association for Shipbuilding and Marine Engineering (VSM), and one of the most authoritative people in German shipbuilding has expressed optimism regarding the end of the recession.
“We are optimistic that we have walked through the valley of tears,”
he said.
A necessary basis for a successful development of the German shipbuilding was laid by Gerhard Schroeder, Merkel's predecessor as the Chancellor of Germany in 2000s, through the adoption of his “Guidelines for the promotion of the German maritime industry.”
Angela Merkel, his successor, has continued Schroeder’s successful course and was able to provide conditions for further industry growth, partially thanks to its so-called tonnage tax, when the billions of profits from container shipping during its boom remained almost tax-free.
However, the financial crisis has broken the consistent development of the German shipbuilding, resulting in a significant decline in demand for container and other cargo vessels, which were always the flagship products of the German shipbuilding, up to 75 percent of which were exported abroad.
The crisis was more or less successfully turned only by those German shipyards, which are traditionally focused on the implementation of state contracts, such as the Bremen Fassmer shipyard, which specializes in the production of warships, as well as police and patrol boats.
For the rest the numbers speak for themselves: in the wake of the crisis eight German shipyards declared bankruptcy, with 3,400 employees affected. Only 13 orders for new ships were received by German shipyards in 2010. The country’s world's market share has shrunk from 3.1 percent in 2001 to a current 1 percent, compared to the South Korean's 33 percent, China's 28 percent, and Japan's 21 percent.
At present the German shipbuilding industry is still suffering from the consequences of the crisis, at the same time facing more aggressive, and sometimes unfair competition from its age-long rivals, such as China, Korea and even Vietnam.
According to Luker, over the last year and a half the South Korean shipbuilders received about €30 billion of state subsidies, which helped them to increase their share in the market of container ships even during the times of the crisis and to dump on the market, receiving favorable orders, with the use of the practice of the establishment of rock-bottom prices.
At the same time, the German federal government currently is not only unable to provide the same volume of state support to its shipbuilders as the Asian governments, but has even cut the state subsidies for its shipbuilders in recent years. In addition, the German banks are still reluctant to grant loans for domestic shipbuilders.
In addition to direct Asian competition, the high cost of steel, along with the higher labor costs, makes the cost of building traditional container ships in Germany significantly higher than in Asia, by at least 30 percent, putting the balance sheets under greater pressure.
The weakness of the US dollar is also associated with serious difficulties for German companies, while the strong euro has resulted in many layoffs in the industry in 2010.
In addition, the acute shortage of engineers has also affected the industry’s plans to take advantage of its huge technological potential, the products of which are always considered as a benchmark of quality by shipowners all over the world.
Unlike Asia, it is currently difficult to find a yard in Germany that isn't lacking engineers and other high-skilled personnel. There is also a problem keeping many top executives within the industry.
For the last several decades and for various reasons the number of shipyard workers in Germany has decreased significantly, although this has resulted in an increase of the number of jobs in the related sectors, such as marine engines and electronics production or the interior of ships. Currently the total number of workers, involved in the German shipbuilding and related branches is estimated in the range of 65,000 to 70,000 people.
In 2010 the German shipyards delivered some 54 ships, which are practically the same figures, compared to 2009, but with higher tonnage and greater value, said a spokesman for the Association for Shipbuilding and Marine Engineering (VSM), who said these figures are currently estimated at nearly 1 million compensated gross tons (CGT), and more than 4 billion euros respectively. In 2009 there were 0.73 million CGT worth 2.6 billion euros.
“2011 will be a decisive year for the industry” said a spokesman from VSM. He said the shipyards will have to fight for additional orders in order to survive. In 2010 of 20,000 people, which are directly involved in the German shipbuilding, 1,300 workers lost their jobs, while since the beginning of the recession in September 2008 total number of layoffs in the industry reached 3,800 people.
At the same time according to state forecasts, during the next several years the industry will continue to recover, and is expected to reach its pre-crisis figures by 2014.
New Opportunities
The financial crisis has forced many German shipyards to think about their future and to look for other recipes of their further success. Currently most of the industry’s players believe that the diversification of activities and the focus on the construction of new types of ships could be considered as one of the drivers of their future growth. The industry's concentration on the building of container and cargo ships appears to be the past, and there is a need to pay more attention to the construction of other types of vessels, including luxury yachts, cruise ships, as well as special vessels for offshore wind farms.
According to Merkel, one of the main goals of the German shipbuilding industry in the coming years is to tap into some promising market niches and to exploit its technological advantage.
“Classic container ships are no longer the future of Germany”, the Chancellor believes.
Merkel made it clear that the ever growing popularity of renewable energies in the EU and the US can provide an additional impetus to the development of German shipbuilding.
In this regard, she has already appealed to the national banks to engage more strongly in funding of projects, including the building of ships for offshore wind farms.
According to representatives of ThyssenKrupp AG (TKMS), the German’s largest shipyard operator, German shipbuilding must use its technological advantage to respond in a global competition for the impending energy shortage through the construction of technologically advanced, durable ships as well as to produce smart ideas. This is true both for the development of “clean ships” as well as those ships, which can be used for resource extraction in deep water.
Some German analysts also believe in the ability of German shipbuilders to exploit certain niches in naval shipbuilding, and, in particular to focus on the construction of ships, which could be used to combat piracy.
However, the changing of production priorities could be associated with serious difficulties to some German shipyards, which for many years benefited from the boom on the fast and relatively easy-to-manufacture container ships. The cost of such ships is usually in the range of only €20 to 40 million, which is significantly less than a highly complex cruise ship, priced at least ten times higher.
Hans Christoph Atzpodien, CEO of TKMS, believes that the concept of the construction of technologically simple merchant ships in Germany is no longer viable, due to the current great yards’ overcapacity in Asia.
“The commercial shipbuilding in Germany is no longer competitive. “We need to focus on our core products”, Atzpodien said.
Such “core products” are currently built at some of the shipyards owned by ThyssenKrupp and in particular Blohm + Voss, a Hamburg shipyard, which combines the construction of surface warships, especially frigates and corvettes, with supply ships.
Eugene Gerden is a free-lance writer based in Moscow, Russia who has covered the European maritime industry for 10 years. He can be reached at gerden.eug@googlemail.com.
The German shipbuilding industry is steadily recovering from the effects of the recession, which is reflected by the ever-growing number of orders, received by German shipyards, as well as recently announced ambitions of the German government and major local players to create conditions for the diversification of German shipbuilding.
Germany has the third largest merchant fleet in the world, and ranks first in containerships. Germany is also one of the leading international ship finance sites, and with a turnover of €85 billion, shipbuilding is a key industry in the German economy.
The storm has abated, but winds are still high. German shipbuilding has coped with the downturn in the wake of the financial and economic crisis remarkably well, avoiding the worst scenarios, however most of the analysts warn that in the absence of reforms the next crisis is only a matter of time.
Angela Merkel, Chancellor of Germany, commented, “Due to the crisis, global competition in the industry has become even more noticeable. The importance of shipbuilding for Germany is reflected by the fact that up to 90 percent of the European foreign trade is transported by sea.”
At the same time Werner Lüken, chairman of the German Association for Shipbuilding and Marine Engineering (VSM), and one of the most authoritative people in German shipbuilding has expressed optimism regarding the end of the recession.
“We are optimistic that we have walked through the valley of tears,”
he said.
A necessary basis for a successful development of the German shipbuilding was laid by Gerhard Schroeder, Merkel's predecessor as the Chancellor of Germany in 2000s, through the adoption of his “Guidelines for the promotion of the German maritime industry.”
Angela Merkel, his successor, has continued Schroeder’s successful course and was able to provide conditions for further industry growth, partially thanks to its so-called tonnage tax, when the billions of profits from container shipping during its boom remained almost tax-free.
However, the financial crisis has broken the consistent development of the German shipbuilding, resulting in a significant decline in demand for container and other cargo vessels, which were always the flagship products of the German shipbuilding, up to 75 percent of which were exported abroad.
The crisis was more or less successfully turned only by those German shipyards, which are traditionally focused on the implementation of state contracts, such as the Bremen Fassmer shipyard, which specializes in the production of warships, as well as police and patrol boats.
For the rest the numbers speak for themselves: in the wake of the crisis eight German shipyards declared bankruptcy, with 3,400 employees affected. Only 13 orders for new ships were received by German shipyards in 2010. The country’s world's market share has shrunk from 3.1 percent in 2001 to a current 1 percent, compared to the South Korean's 33 percent, China's 28 percent, and Japan's 21 percent.
At present the German shipbuilding industry is still suffering from the consequences of the crisis, at the same time facing more aggressive, and sometimes unfair competition from its age-long rivals, such as China, Korea and even Vietnam.
According to Luker, over the last year and a half the South Korean shipbuilders received about €30 billion of state subsidies, which helped them to increase their share in the market of container ships even during the times of the crisis and to dump on the market, receiving favorable orders, with the use of the practice of the establishment of rock-bottom prices.
At the same time, the German federal government currently is not only unable to provide the same volume of state support to its shipbuilders as the Asian governments, but has even cut the state subsidies for its shipbuilders in recent years. In addition, the German banks are still reluctant to grant loans for domestic shipbuilders.
In addition to direct Asian competition, the high cost of steel, along with the higher labor costs, makes the cost of building traditional container ships in Germany significantly higher than in Asia, by at least 30 percent, putting the balance sheets under greater pressure.
The weakness of the US dollar is also associated with serious difficulties for German companies, while the strong euro has resulted in many layoffs in the industry in 2010.
In addition, the acute shortage of engineers has also affected the industry’s plans to take advantage of its huge technological potential, the products of which are always considered as a benchmark of quality by shipowners all over the world.
Unlike Asia, it is currently difficult to find a yard in Germany that isn't lacking engineers and other high-skilled personnel. There is also a problem keeping many top executives within the industry.
For the last several decades and for various reasons the number of shipyard workers in Germany has decreased significantly, although this has resulted in an increase of the number of jobs in the related sectors, such as marine engines and electronics production or the interior of ships. Currently the total number of workers, involved in the German shipbuilding and related branches is estimated in the range of 65,000 to 70,000 people.
In 2010 the German shipyards delivered some 54 ships, which are practically the same figures, compared to 2009, but with higher tonnage and greater value, said a spokesman for the Association for Shipbuilding and Marine Engineering (VSM), who said these figures are currently estimated at nearly 1 million compensated gross tons (CGT), and more than 4 billion euros respectively. In 2009 there were 0.73 million CGT worth 2.6 billion euros.
“2011 will be a decisive year for the industry” said a spokesman from VSM. He said the shipyards will have to fight for additional orders in order to survive. In 2010 of 20,000 people, which are directly involved in the German shipbuilding, 1,300 workers lost their jobs, while since the beginning of the recession in September 2008 total number of layoffs in the industry reached 3,800 people.
At the same time according to state forecasts, during the next several years the industry will continue to recover, and is expected to reach its pre-crisis figures by 2014.
New Opportunities
The financial crisis has forced many German shipyards to think about their future and to look for other recipes of their further success. Currently most of the industry’s players believe that the diversification of activities and the focus on the construction of new types of ships could be considered as one of the drivers of their future growth. The industry's concentration on the building of container and cargo ships appears to be the past, and there is a need to pay more attention to the construction of other types of vessels, including luxury yachts, cruise ships, as well as special vessels for offshore wind farms.
According to Merkel, one of the main goals of the German shipbuilding industry in the coming years is to tap into some promising market niches and to exploit its technological advantage.
“Classic container ships are no longer the future of Germany”, the Chancellor believes.
Merkel made it clear that the ever growing popularity of renewable energies in the EU and the US can provide an additional impetus to the development of German shipbuilding.
In this regard, she has already appealed to the national banks to engage more strongly in funding of projects, including the building of ships for offshore wind farms.
According to representatives of ThyssenKrupp AG (TKMS), the German’s largest shipyard operator, German shipbuilding must use its technological advantage to respond in a global competition for the impending energy shortage through the construction of technologically advanced, durable ships as well as to produce smart ideas. This is true both for the development of “clean ships” as well as those ships, which can be used for resource extraction in deep water.
Some German analysts also believe in the ability of German shipbuilders to exploit certain niches in naval shipbuilding, and, in particular to focus on the construction of ships, which could be used to combat piracy.
However, the changing of production priorities could be associated with serious difficulties to some German shipyards, which for many years benefited from the boom on the fast and relatively easy-to-manufacture container ships. The cost of such ships is usually in the range of only €20 to 40 million, which is significantly less than a highly complex cruise ship, priced at least ten times higher.
Hans Christoph Atzpodien, CEO of TKMS, believes that the concept of the construction of technologically simple merchant ships in Germany is no longer viable, due to the current great yards’ overcapacity in Asia.
“The commercial shipbuilding in Germany is no longer competitive. “We need to focus on our core products”, Atzpodien said.
Such “core products” are currently built at some of the shipyards owned by ThyssenKrupp and in particular Blohm + Voss, a Hamburg shipyard, which combines the construction of surface warships, especially frigates and corvettes, with supply ships.
Eugene Gerden is a free-lance writer based in Moscow, Russia who has covered the European maritime industry for 10 years. He can be reached at gerden.eug@googlemail.com.
UP to Quadruple Size of Inland California Intermodal Rail Yard
Union Pacific CEO Jim Young has revealed plans to quadruple the size of the Class I railroad's intermodal yard in the California Central Valley city of Lathrop and shift additional truck traffic away from the Port of Oakland to the inland facility.
Young detailed the plans during a Wednesday meeting with Lathrop city officials including Mayor Willie Weatherford, City Manager Steve Pinkerton and staff members who have been working on the proposed 4 million-square-foot CenterPoint Business Park project to be located next to the UP intermodal yard.
At the UP yard, inbound containers from the Port of Oakland arrive by truck and then are loaded on double-stacked rail cars which are then built into trains. Arriving trains are deconstructed in the same way, with outbound containers being trucked back to Oakland.
At the end of the estimated three year construction schedule, the UP yard expansion would increase the number of daily truck trips to the intermodal yard from just under 960 to about 2,200 and increase the annual throughput of the intermodal yard from about 270,000 TEUs to about 730,000 TEUs. The expansion would also necessitate UP expanding the intermodal yard workforce from a current level of about 70 workers to nearly 140 at full build-out.
To help mitigate pollution created by the rise in truck trips, the yard expansion will include the replacement of the current nine manual truck gates with 10 automated gates.
The expanded intermodal yard, located about an hour's dray from the Port of Oakland, could also attract sizable logistics and warehouse investment to the Lathrop and neighboring Manteca areas.
With an eye toward the yard expansion, CenterPoint purchased more than 250 acres of land adjacent to the UP property located in Manteca and secured the rights for development. Designed for large distribution centers ranging from 250,000 to 1 million square feet, the $178 million development is planned to be marketed heavily to tenants wishing to take advantage of the UP yard. The business park project is expected to create up to 600 full-time jobs and an additional 800 jobs during CenterPoint's estimated 12 to 14 month construction schedule.
Young detailed the plans during a Wednesday meeting with Lathrop city officials including Mayor Willie Weatherford, City Manager Steve Pinkerton and staff members who have been working on the proposed 4 million-square-foot CenterPoint Business Park project to be located next to the UP intermodal yard.
At the UP yard, inbound containers from the Port of Oakland arrive by truck and then are loaded on double-stacked rail cars which are then built into trains. Arriving trains are deconstructed in the same way, with outbound containers being trucked back to Oakland.
At the end of the estimated three year construction schedule, the UP yard expansion would increase the number of daily truck trips to the intermodal yard from just under 960 to about 2,200 and increase the annual throughput of the intermodal yard from about 270,000 TEUs to about 730,000 TEUs. The expansion would also necessitate UP expanding the intermodal yard workforce from a current level of about 70 workers to nearly 140 at full build-out.
To help mitigate pollution created by the rise in truck trips, the yard expansion will include the replacement of the current nine manual truck gates with 10 automated gates.
The expanded intermodal yard, located about an hour's dray from the Port of Oakland, could also attract sizable logistics and warehouse investment to the Lathrop and neighboring Manteca areas.
With an eye toward the yard expansion, CenterPoint purchased more than 250 acres of land adjacent to the UP property located in Manteca and secured the rights for development. Designed for large distribution centers ranging from 250,000 to 1 million square feet, the $178 million development is planned to be marketed heavily to tenants wishing to take advantage of the UP yard. The business park project is expected to create up to 600 full-time jobs and an additional 800 jobs during CenterPoint's estimated 12 to 14 month construction schedule.
