Tied Up at the Dock

This is what you’d call spinnage:

1. “According to an official release … freight rates fell to new lows during Q1 2012, while oil prices climbed sharply until mid-March, with Rotterdam bunker prices rising to nearly $ 720 per tonne. In response to these challenging market conditions, CMA CGM continued to implement its cost reduction plan, which delivered $ 96 million in savings over the quarter, above initial target.” The report also stated that the line successfully deployed the operational agreements in partnership with MSC on the Asia/Northern Europe trades and with Maersk on the Asia/Mediterranean lines.”

[Sounds like smooth sailing, right? But take a look at how the report ended.]

“Despite these efforts, CMA CGM reported a net loss of $ 248 million for first quarter 2012, which nevertheless represents one of the best financial and operating performances in the container shipping industry for the period.” –

2. Notes from Alphaliner: “The majority of ocean container carriers will lose money in the second quarter following their failure to fully implement rate hikes in May and June …

“Carriers’ average operating margins shrank in the first three months of the year compared to the final quarter of 2011 despite higher rates on the key trade routes since January …

“The average would have been worse if the results of Malaysia’s MISC Berhad had been included. The carrier, which is quitting liner shipping this month, posted a negative operating margin of a minus 153 percent in the first quarter, The operating margins of the other carriers ranged from a minus 2 percent to a minus 25 percent in the first three months of this year.” –

3. And some notes from North Europe Global Port Tracker: “The slowdown in container volumes handled by ports in northern Europe indicates the continent may be slipping into a deeper recession than anticipated …

“‘There is little if any growth compared to 2011, and by th end of third quarter we are predicting volumes to begin to enter a more serious downturn,’ said Ben Hackett, of Hackett Associates …

“The report said European trade would be hit even harder than expected if this trend continued.” –

4. Times are tough, all right, but don’t tell the taxpayers! After reporting a drop in container imports in April, here’s what the Journal of Commerce reported on June 7th: “The Los Angeles Harbor Commission adopted a 2012-2013 fiscal year budget of $ 265.7 million for terminal expansion, waterfront development and transportation projects.”

[But let’s not forget the real reason for that bloated budget – those big, fat salaries.]