Mumbai vessel collision update: Ports to reopen August 15th

UPDATE – August 13, 2010:
First, an update on port operations:

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):

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.

Cargo ships collide at Mumbai – all inbound and outbound sailings suspended

If you source from India and your logistics service provider is any good, hopefully they’ve already given you a heads up. There was a major accident in Mumbai harbor when the vessel MV Khalijia III, carrying steel coils, and a container ship, the 2,314 TEU MSC Chitra, collided on Saturday. There were no reported injuries or deaths and the India Coast Guard rescued all sailors. The MSC Chitra has lost somewhere in the neighborhood of 400 containers overboard and is listing dangerously in the harbor. The good news is that the oil leak from the MSC Chitra into the harbor has been plugged. However, there is still the oil slick to deal with and also the danger of further environmental damage as it appears some of the containers that have gone overboard contain hazardous materials:

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:

Oakland truckers plan a strike at the port Dec 15-18, 2009

Update: 9:00am PST – Received reports that police presence in and around the port/terminals is pretty heavy. Also rumors that the strike might only last through today.

I received a copy of a flier that’s been circulating amongst the drivers at the Port of Oakland. Supposedly it’s being organized by the Northern California Port and Rail Truckers Association as well as the National Port Drivers Association in Los Angeles. I’ve heard of the National Port Drivers Association but must plead ignorance regarding the Northern California Port and Rail Truckers Association. A quick Google search of both turned up some news articles, but failed to produce a web site for either. If you stumble across sites for either or both, let us know and we’ll be happy to link.

Bottom line, now that the deadline for retrofitting trucks to meet new CARB (California Air Resources Board) and BAAQMD (Bay Area Air Quality Management District) emission regulations is fast approaching (December 31st) a number of drivers who either could not, or did not bother, to get grants or pony up to retrofit their trucks are panicking at the fact that they will be barred from entering the port to pick up and drop containers. An overview of the new air regulations can be found at CARB’s website here:

Trucks with model year 1993 or older engines are no longer legal at ports and intermodal rail yards starting January 1, 2010.

Trucks with model year 1994 – 2003 engines must be equipped with an ARB approved Level 3 control device (e.g. a particulate filter) starting January 1, 2010.

While I have a great deal of sympathy and respect for owner operators in general, this regulation has been long in coming and well publicized by the Port of Oakland, terminal operators, CARB, BAAQMD, local media, politicians, etc. Lots of outreach and communication was done on behalf of the trucker community over the past year not only advising them of the upcoming regulation but also educating them about how to secure grants or funds for retrofitting 1994-2003 year trucks. There are certainly plenty of struggling drivers who tried but could not get money to retrofit their trucks, but there’s also plenty of drivers who either did not care to be informed or couldn’t be bothered to keep up with the regulations. Not to mention plenty of fly-by-night drayage companies who did not bother to think about their drivers and what will happen when they can’t enter the ports.

It will be interesting to see how things pan out at the port today. As we hear more, we’ll let you know how much support this has gotten amongst the drivers and whether there is any significant disruption.

More gloomy economic news: Conway and FedEx revise earnings forecasts

How bad is it?

Con-way said that is has revised its 2008 full-year earnings estimate from continuing operations to be between $2.20 and $2.35 per diluted share, which is down from previous guidance of $2.60 to $2.80 per diluted share.

They will be laying off staff as well:

And with the consumer spending slowdown resulting in significantly lower volumes for Con-way Freight over October (down 3.8 percent) and November (down 9.2 percent), the company’s less-than-truckload (LTL) unit, the company announced it is reducing the Con-way Freight staff by 8 percent—or roughly 1,450 employees.

As for FedEx:

FedEx said that it will report earnings of $1.58 per diluted share for the second quarter ended November 30, with previous guidance at $1.40 to $1.60 per diluted share. And for fiscal 2009, FedEx reduced earnings guidance to $3.50 to $4.75 per diluted share from previous guidance of $4.75 to $5.25.

Hey, at least they will be making money – there’s a lot of companies out there that won’t be.

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