Click on the image above for a larger view that you can print or download. For your easy reference, here’s a simple and quick list just by name:

Rank Airport
1 MEMPHIS (MEM)
2 HONG KONG (HKG)
3 SHANGHAI (PVG)
4 INCHEON (ICN)
5 PARIS (CDG)
6 ANCHORAGE (ANC)*
7 LOUISVILLE (SDF)
8 DUBAI (DXB)
9 FRANKFURT (FRA)
10 TOKYO (NRT)
11 SINGAPORE (SIN)
12 MIAMI (MIA)
13 LOS ANGELES (LAX)
14 BEIJING (PEK)
15 TAIPEI (TPE)
16 LONDON (LHR)
17 AMSTERDAM (AMS)
18 NEW YORK (JFK)
19 CHICAGO (ORD)
20 BANGKOK (BKK)
21 GUANGZHOU (CAN)
22 INDIANAPOLIS (IND)
23 NEWARK (EWR)
24 TOKYO (HND)
25 LUXEMBOURG (LUX)
26 OSAKA (KIX)
27 SHENZHEN (SZX)
28 KUALA LUMPUR (KUL)
29 DALLAS/FORTWORTH (DFW)
30 MUMBAI (BOM)

How does my KFC experience in Beijing compare? A year ago, my standard meal cost RMB 21.50. A couple of months ago it rose to RMB 25.50. Today, for the first time, it set me back RMB 28.50. For those keeping track, that’s a 32.6% price hike in a single year.

There’s nothing scientific about this sample. It’s purely anecdotal. Perhaps KFC, or the Beijing market, is an aberration (I’m eager to hear anyone’s theories). But I think it’s a data point worth noting, such caveats aside. KFC isn’t some outlier in the Chinese economy, like high-priced Starbucks that still caters mainly to young, cosmopolitan latte-sippers. KFC is incredibly popular with the laobaixing (the “common people:), who find chicken — especially the localized versions offered at KFC — far more familiar and appetizing than either coffee or burgers. It outnumbers McDonald’s 2:1, with over 2,000 outlets and a reach that extends far into 3rd and 4th tier provincial cities.

As he states in his post, it’s ridiculous to challenge the Chinese government’s official inflation statistics based on this one simple example. But I think it is a very common occurrence and something we see and experience more often than not. When I talk to my relatives living overseas, they could care less what the official line is on prices – they talk about how much a cup of coffee or tea costs, or why rice has gotten so expensive, or, like Professor Chovanec, the rise or fall of prices at their favorite fast food restaurants. Those perceptions often shape how we view inflation (or deflation, for that matter).

India’s two biggest ports, the Jawaharlal Nehru Port and Mumbai Port, conducted limited operations on Friday.
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Salvagers cleared about 60 of the 300 containers that fell off of the MSC Chitra and spilled into the main channel of Mumbai Harbor, blocking the entrance to both ports.

Vessels with a draft of less than 30 feet were being allowed to enter and leave JNPT Friday during high tide and under naval escort.

“Unless the Navy scans the channels and finds it completely clear of containers, normal operations cannot resume,” N. Maharana, operations head at Jawaharlal Nehru Port Trust, told Bloomberg News.

Mumbai Port has also begun limited operations, said H. Khatri, a deputy director at the government’s Directorate of Shipping, who is overseeing the clearance operations. He declined to comment on when the work may be completed.

A number of smaller draft vessels already departed yesterday and a number of similar size vessels are being allowed to call the port today. I can not comment on all the container lines that call Mumbai/JNPT, but can provide the following info on APL and Maersk, two of the carriers I use in my day job:

APL Melbourne (U.S. West Coast) – Original ETD of August 8th – vessel is at berth and awaiting permission to depart, which could happen any time.

APL Doha (U.S. West Coast) – vessel is supposedly at berth and is scheduled for August 15th departure. Some container bookings not already loaded on the APL Melbourne are being switched to this vessel.

APL Sharjah (U.S. West Coast) – vessel has been changed to APL Chicago with an ETD of August 18th.

Maersk Utah (U.S. East Coast) – Original ETD of August 12th – skipped Mumbai/JNPT completely and discharged all Mumbai/JNPT cargo in Pipavav. All cargo originally booked for this vessel is now delayed a week and will instead depart on the Maersk Missouri, ETD August 19th

Nedlloyd Hudson (U.S. West Coast) – Berthed since August 8th and awaiting permission to depart.

Nedlloyd Barentz (U.S. West Coast) – All Mumbai/JNPT cargo will instead be discharged in Pipavav. Vessel will NOT call Mumbai/JNPT so any outbound cargo booked for this vessel will instead leave a week later or more.

Both carriers are accepting bookings ex-Mumbai/JNPT, including for inland points that route through the ports. I have asked both carriers how they plan to handle and route new bookings through what will be a very backlogged and congested port. I also asked why they wouldn’t route cargo through either Mundra or Pipavav respectively until things clear up in Mumbai. So far, no reply other than they are working on getting their vessels moving as the port clears up and are looking at options.

According to Bloomberg, the government aims to have all the containers floating/sunk in the harbor cleared tomorrow. I find this hard to believe considering only 60 of the roughly 300 have been removed.

Meanwhile, MSC continues to claim the Khalijia III was at fault.

ORIGINAL STORY DATED AUGUST 10, 2010

The big news yesterday was the collision of two vessels in Mumbai harbor on Saturday, with one of the vessels involved a 2300+ TEU MSC container vessel, thereby closing the harbor to all incoming and outgoing vessel traffic. Full story here. Today it appears that local officials are planning for an August 15th reopening for both Mumbai and Jawaharlal Nehru ports. That’s a full week after the initial collision: that means a week’s backlog of vessel calls to and from the port and a massive backlog of containers currently sitting at JNPT and Mumbai. And all of this hinges on whether the local authorities can remove enough containers from the water on time and either get the MSC vessel out of the way or safely route vessels around her.

According to a report today from the JOC, MSC has recovered the “black box” from their vessel and is claiming the other vessel, the Khalijia III, is at fault:

“…the Khaligia 3, with salvors’ escort tugs in attendance, left what we believe was the Khaligia 3’s anchorage position, and crossed the fairway ahead of the MSC Chitra heading generally southbound and turning to port.

“For reasons not known to us, the Khaligia 3 unexpectedly continued turning to port, and came back to cross the fairway again, now heading in a generally northbound direction, and struck the MSC Chitra on the MSC Chitra’s port side while the MSC Chitra was still properly navigating in the main channel.”

Meanwhile, the India government is ordering salvagers to speed up the removal of containers that fell overboard from the MSC Chitra:

“This work has to be speeded up,” Rakesh Srivastava, joint secretary for ports at the Ministry of Shipping said in an interview after a meeting to discuss the recovery measures today. Salvagers are retrieving only four to six boxes a day of the 300 floating and submerged, he said.

According to this same report from Bloomberg, some 32 ships have been either stranded in the port or awaiting arrival. Some crude oil deliveries have been delayed as well as soybean meal exports. How are salvagers removing containers from the water? Via floating cranes:

Cranes mounted on barrages have moved closer to the sinking ship to collect falling or floating containers. MSC Chitra started sinking after it collided with another vessel MV Khalijia on Saturday.

Some carriers are already planning contingencies to route around Mumbai temporarily for India import and export cargo. You should check with your logistics service provider or carrier for their current plans on routing import/export containers from India. Below is a map of alternate port services to Mumbai and a tentative list of the carriers that already have services there (click for larger view):

Potential contingency ports for Mumbai - CLICK FOR LARGER VIEW

Pipavav – called by Maersk Line, NYK Line, UASC, Hanjin, K-Line, Hyundai, MOL

Mundra – called by APL, MSC, Hapag Lloyd, NYK Line, CMA-CGM, Zim Line

Above is just a tentative list, I may have missed a carrier or two. I know from my own contacts that Maersk Line is considering discharging Mumbai cargo at Pipavav and will make a decision soon on how they will handle export cargo. APL is considering routing U.S. East Coast cargo via Mundra. In both cases, the carriers will have to sort out the rail connections to Mundra and Pipavav – no idea on whether they have plans to rail pending containers back from Mumbai over to Pipavav and Mundra.

My understanding is that no alternative exists yet for the U.S. West Coast for APL and Maersk as both carriers trans-ship from Mumbai/JNPT to Asia via feeder vessel for mother vessels calling the U.S. West Coast from Asia. I would assume that both of them could instead rail containers to Pipavav and Mundra and have feeder vessels call there instead of Mumbai, but I have not heard any news regarding this. Again, check with your respective logistics service providers and carriers.

MSC Chitra leaking oil and listing after collision in Mumbai harbor on Saturday (image received via e-mail from contacts in India)

At least 31 containers with hazardous chemicals including organo-phosphorous pesticides, sodium hydrochloride and pyrethroid pesticides are on board and quite a few of them might have tumbled into the sea and their contents leaked, he said.

The biggest impact to the global supply chain is the closure of Jawaharlal Nehru / Mumbai ports. Already the ports have been closed for 2 days and there’s no firm timetable for when they will reopen:

It may take “at least a couple of days” for normal operations to resume, said Venkatesh, whose group represents about 130 exporters and freight forwarders. He said there hasn’t been a similar collision in the channels off Mumbai in his 30 years in the industry.

As the above linked article mentions, these two ports handle about 40% of the exports coming out of India. If your company sources from India, chances are the majority of your product comes through these port complexes. There are a number of vessels sitting in the harbor awaiting departure and a number of vessels that are delaying arrival due to the closure. Check with your respective carriers and logistics service providers to see which of your containers / vessels are being delayed due to the temporary port closure.

Here’s a short news clip from India on the vessel collision.

As slightly longer video with more commentary on the oil spill from the MSC vessel here:

He has an interesting article in China Economic Review regarding the current labor situation in China and the trend to value-added manufacturing vs. simple low-cost manufacturing which I tend to agree with:

The crunch is concentrated almost entirely in the market for more skilled, experienced workers – and it is becoming more acute as manufacturers try to move up the value chain. Virtually all of the high-profile cases where Chinese workers have successfully pressed their demands have involved activities – like automotive or electronics manufacturing – whose skill requirements make qualified employees hard to recruit, expensive to train, and difficult to replace.

That sounds like bad news for Chinese manufacturers; it doesn’t have to be. The day after Hon Hai announced its planned wage increase, the company’s stock price dropped by 5% on fears that it wouldn’t be able to pass those higher costs onto customers. But if investors looked closer, they would see that the company’s success is largely based on an ability to deliver quality and reliability, while ensuring protection of its customers’ proprietary designs and technologies.

Even in simple, comparatively lower cost product categories I have seen examples where companies stuck with, or returned, to Chinese manufacturers whose labor and/or other costs had recently risen. Why? Because while those Chinese manufacturers may have raised prices, their quality, consistency, reliability, and ease of doing business added value to the transaction that outweighed the increase in price. Similarly I’ve seen examples where Chinese factories raised prices simply because they thought they could based on the market conditions widely reported – but failed to improve or even maintain current levels of product quality, etc.

While China still has a large basis of low-value manufacturing, they continue to take a climb up the value ladder. Even in lower value manufacturing, those Chinese factories with a long-term view who cultivate strong working relationships with their clients, adding value and consistency to their product, should continue to enjoy success.

“The traditional peak season may be melting away,” said Ben Hackett, founder of Hackett Associates, which produces the Port Tracker for the NRF.

The report said double-digit increases in June and July apparently were swollen by backlogs that developed earlier this year when carriers moved slowly to reactivate ships they idled during the recession.

“With many retailers appearing to bring merchandise in early to avoid any further bottlenecks, July is likely to be the peak shipping month for 2010 rather than the traditional rush of holiday season merchandise in October,” the report said.

It’s important to note that this report tracks import container ARRIVALS at U.S. ports, not origin departures. The report is expecting July to have the highest container volume at 1.38 million TEUs with August and September dropping slightly to 1.32 million TEUs each.

I’m going to disagree with their assessment of July being the highest volume month. Our sources in the market seem to indicate that the last two weeks of August and first two weeks of September could likely be the busiest, and challenging, weeks for shipments departing Asia. That would mean containers arriving mostly in September for U.S. ports. In addition, equipment and space out of China is becoming increasingly difficult in August, not easier. This is particularly true for vessel bookings post August 15th. On top of this, multiple container lines, especially Maersk, are having equipment shortages, particularly acute in South China. Thus, I believe that import container volume will be heaviest in September, not July, and that August is already looking to be quite heavy as well.

I do agree that the container lines may have gotten a little greedy and ahead of themselves with their never-ending rate increases. I think the peak season will soften sooner and more rapidly than the container line industry thinks. All this talk of non-expiring PSS or PSS with expiration dates of Feb/Mar/Apr of next year may collapse if Nov/Dec comes along and volumes drop. The level of retail sales simply does not support the current trend of heavy double digit increases in volume – at some point, inventory levels will stabilize or companies may find out they ordered too much and volumes will stabilize or even come down. While carriers have been largely allocating vessels to the profitable Asia-Europe trade lanes, eventually more capacity will be coming to the Trans-Pacific trade.

Chinese New Year, of course, could change everything, at least temporarily until the next contract season. But even Chinese New Year could be subdued if enough retailers have a weak Holiday season. I’m still on the fence as to whether we’ll experience a double-dip recession or even a worsening of the economy, but at the very best economic growth has slowed and I expect the latter half of the year, including the holiday season, to grow only moderately.

Bottom line, I think there’s still a lot of life left in the current Peak Season from Asia, especially China, that will see import container volumes go even higher in September. However, I have a hunch that the market will soften, and fairly quickly, sometime post-September.

HAHAHAHAHAHAHA….oh wait, you’re actually serious?

Shipping lines in the eastbound Pacific announced a huge rate increase effective Aug. 10 of $500 per 40-foot container, which would require an unprecedented renegotiation of service contracts if the lines can pull it off.

The Transpacific Stabilization Agreement, a discussion group of 14 carriers in the Asia-to-U.S. trade, said immediate action is needed to bring freight rates back to compensatory levels.

“The eastbound trans-Pacific trade lane has been driven by panic, and panic is difficult to stop once it has begun,” said W. W. Lee, chief executive for container line business at Hanjin Shipping.

The voluntary guideline announced Tuesday by TSA is likely to meet fierce resistance from shippers, many of whom have recently concluded service contract negotiations for the 2009-10 shipping season and are experiencing financial pressures of their own.

Emphasis mine. I predict “epic fail” for the carriers on this one. These guys are their own worst enemies. They went out tripping over themselves to cut rates in an effort to maintain or increase market share and now that they have belatedly realized that they have cut their own throats in the process they are going to try to turnaround and massively increase rates? It’s called the “market” for a reason, market conditions set the prices, not arbitrary pricing agreement groups. No shipper who recently signed contracts expected to carry them through the next 12 months is going to suddenly agree to a $500 per FEU increase – nobody is going to want to open up their contracts again, and certainly not for a price increase. Notice too that the increase is said to be “voluntary”. That usually means the carriers have wide discretion whether to introduce the price increase or not or whether to implement it fully. I don’t count on it happening.

While a number of resourceful people have converted shipping containers into make-shift shelters at the margin of society for years, architects and green designers are also increasingly turning to the strong, cheap boxes as source building blocks.

Shipping containers can be readily modified with a range of creature comforts and can be connected and stacked to create modular, efficient spaces for a fraction of the cost, labor, and resources of more conventional materials.

They then highlight, with cool photos, 12 different homes made from shipping containers. We’ve mentioned this phenomenon in the past here and here.

I think I like the ATC (All-Terrain Cabin) and the Ecopods best.

The U.S. Court of Appeals for the Ninth Circuit ruled in favor of the American Trucking Associations (ATA) today in its lawsuit seeking an injunction against the Ports of Los Angeles and Long Beach Concession Plans.

The three-judge panel ruled unanimously to remand the case to the U.S. District Court and indicated that the judge should grant the ATA an injunction against all or part of the concession plans.

“In short, motor carriers should not be required to adhere to the various unconstitutional provisions in the Ports’ [concession] agreements, and are likely to suffer irrevocably if forced to do that or give up their businesses,” the court’s opinion said. ATA had not challenged the ports’ Clean Truck Program, which bans older trucks and uses a container fee to subsidize the purchase of newer, cleaner trucks.

Here’s more from the Journal of Commerce:

“The district court shall proceed as quickly as possible so that ATA will not suffer unnecessary harm from any unconstitutional provisions,” the appellate court stated. The judges also said they will not entertain a petition for rehearing.

Of most immediacy, it appears that the Port of Los Angeles can not require that harbor trucking companies by the end of this year must replace 20 percent of their owner-operator drivers with employee drivers.

“That requirement is dead,” said Curtis Whalen, executive director of the ATA’s intermodal conference. “We are very pleased with this decision,” he said.

The Los Angeles-Long Beach clean-truck program seeks to reduce pollution from harbor trucks by 80 percent over the next five years. The trucking industry supports that goal and noted that a number of motor carriers have already introduced into their fleets new clean-diesel or liquefied natural gas vehicles that comply with the ports’ strict emission standards.

However, the program also requires that motor carriers sign concession agreements with the ports that govern many aspects of their operations. The 9th Circuit said some of the requirements, such as the employee-driver mandate, financial disclosure statements and truck parking restrictions amount to state or local regulation of interstate trucking. The appellate court said such regulation is clearly preempted by federal law.

Needless to say, the Naural Resources Defense Council, who supported the employee-driver mandate, is not pleased:

“This decision today places in jeopardy the clean air goals at the ports, as well as every port infrastructure expansion project that relies on clean trucks. We’re going to vigorously fight to protect these truck plans in court. Properly maintained, well-managed goods movement at the ports is good for business and good for the health of people living in port communities.”

The funny thing is, I would venture a guess that the ATA and the trucking interests in the ports would agree completely with the last sentence of that paragraph. I can’t find any indication that the trucking industry is challenging any of the environmental elements of the Clean Truck Program, apparently has no problem with the drayage truck registry or the upgrading/replacement of older trucks, etc. It’s only the concessionary agreements, particularly the employee-driver mandate, that they have opposed.

We’ll see what else we can learn about this, but in the meantime, or for those of you who are just stumbling onto this topic, here’s a lot more info for you:

ATA vs. LA/Long Beach port authorities: the battle continues

ATA legal challendes to LA/Long Beach “concession plans” – it’s not over yet.

ATA appeal denied by Ninth Circuit Court

FMC to possibly derail Oct. 1 Clean Truck Plan implementation date?

LA/Long Beach Clean Trucks Program on track to start October 1st

ATA goes to appeals court to stop SoCal ports’ truck plans

ATA takes ports to court over Clean Truck proposals

LA/Long Beach Clean Truck Program approved

Truckers coalition opposes portions of the Clean Air Action Plan

Environmental issues threaten competitiveness in Southern California

Hong Kong International Airport (HKIA) said it handled 198,000 tonnes of cargo in February, 19.7 percent less than the same month last year, as the global economic downturn took its toll.

February’s fall was despite this year’s Chinese New Year celebrations falling earlier than in 2008, which meant that manufacturing activities in China had resumed.

HKIA also reported a 13.7-percent fall in passenger volume to 3.4 million.

They’re certainly not the only ones. No surprise as the weak global economy saps demand for passengers and cargo.