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A $120 million port and multimodal transport project in Myanmar will open up international trade with India’s isolated North East provinces.

As part of a recent bilateral trade deal signed by Myanmar and India, the two countries pledged to complete the scheme linking the provinces to Sittwe port in Myanmar overland via India’s Mizoram by 2013.

The port requires extensive dredging and the construction of new terminals but once operational will offer direct sailings to enable shippers to pick up mainline services Kolkata. The two countries also pledged to double bilateral trade to $3 billion by 2015 by reducing trade tariffs.

The North Eastern states, commonly known as the Seven Sisters, have failed to benefit from India’s rapid economic growth, not least because they are only linked to the rest of the country and its ports via the Siliguri corridor, which skirts around northern Bangladesh through the Hamalaya mountains. The 932-mile journey to the nearest major Indian port – Kolkata – can take a week overland.

India has also been rebuilding its fractured relationship with Bangladesh, where the latter’s port of Chittagong also offers efficient access to the Seven Sisters.

— Contact Mike King at michael@borderline.eu.com

Excess capacity and insistence on chasing unprofitable market share will cause many container ship lines to lose money this year despite global volume growth of more than 7 percent, Drewry Maritime Research said in its quarterly Container Forecaster.

Drewry said growth in intra-Asia traffic and on emerging trade lanes with Latin America is offsetting weakness in developed economies, but and that this year “should have been much better for the industry.”

“There is every chance that operators will lose significant money in 2012 unless the fundamental trade supply/demand dynamics are pulled into equilibrium. Vessel layups, which will be unwelcome news for independent shipowners, would be an obvious answer, but the amount is still minimal at the moment and it seems unlikely to reach the levels previously experienced in 2009-10,” Drewry said.

The industry’s chronic supply-demand imbalance shows no sign of abating during the next five years, the report said. Orders of 2 million 20-foot container equivalents of vessel capacity since June, 80 percent for which represents ships of at least 8,000 TEUs, have “already done the damage.”

With major east-west trade lanes awash in capacity, carriers are “cascading” large ships onto secondary routes. “Effective cascading is now becoming a problem for carriers as they struggle to deploy ships into smaller trades without inflicting damage,” Drewry said.

Leading carriers clearly “are intent on protecting market share rather than maintaining profitability,” Drewry said. “The resultant erosion of rates means that overcapacity remains a huge concern for carriers and a factor of instability for shippers as well as companies which finance or supply the carriers.”

Drewry said a weaker-than-anticipated peak season has undermined headhaul volumes from Asia to Europe, and especially in on trans-Pacific to the United States. With load factors of only 80 to 85 percent, carriers have failed to push through peak season surcharges and have cut spot rates to unprofitable levels.

“Perhaps it is ‘relatively’ easy for the biggest players to sit back and believe that the smaller carriers will go bankrupt this time round or will re-trench to their regional markets and the industry will re-adjust itself. But a great deal of pain will be experienced even if this process does take place,” Drewry said.

Philippines Airlines’ cargo business resumed last weekend after one of the country’s largest cargo carriers completed the outsourcing of its operations.

Pal Cargo’s services had been suspended since the PAL Employees Association began a strike on September 27, following the carrier’s announcement to outsource about 2,600 jobs.

“We’re now accepting cargo bookings for all international flights including wide-body domestic flights that operate out of (Ninoy Aquino International Airport) Terminal 2,” said airline president Jaime Bautista,

In the last fiscal year, the carrier uplifted 139,284 tons, a 9 percent year-over-year gain.

— Contact Mike King at michael@borderline.eu.com

Qatar Airways is launching scheduled freighter services to Atlanta, Houston and Toronto, the latest expansion in the Gulf Arab carrier’s bid to become one of the world’s biggest air cargo operators within five years.

The 777 freighter flights between Qatar Airways’ Doha home base and the three new North American destinations will be routed via the Luxembourg hub of Cargolux, the European all-cargo carrier in which it acquired a 35 percent stake in June. Atlanta and Houston will be served with twice-weekly flights from November 2, while a weekly Toronto service will start on November 7.

Qatar Airways Cargo’s current North American dedicated freighter operation is limited to Chicago, supported by belly space capacity on daily non-stop passenger flights to Houston, New York and Washington and a thrice- weekly service to Montreal.

“With the recent completion of our 35 percent stake in Cargolux, Europe’s largest cargo airline, we have increased our freighter operations, which ties seamlessly into the airline’s strategy to have as many connecting points across the globe from our Doha hub,” said Qatar Airways CEO Akbar Al-Baker.

“We have identified tremendous route expansion opportunities around the world, including North America where the freighter market is huge.”

Al-Baker said the airline’s dedicated cargo network is an extension of its strategy to develop its global air transport business. In the past few months, Qatar Airways has significantly boosted its cargo operations with increased frequencies to several destinations, including Kuwait and Hanoi.

Extra cargo flights will operate to Chicago, Colombo, Bahrain, Dammam, Hong Kong and Tehran from October 30. In addition, a new cargo service to Jeddah, Saudi Arabia, will be launched on the same day.
Qatar Airways Cargo currently has a fleet of three Airbus A300-600s and two Boeing 777 freighters with a further three 777s on order.

The carrier plans to convert 15 of its Airbus A330 passenger aircraft into freighters starting in 2012.

— Contact Bruce Barnard at brucebarnard47@hotmail.com.

Air France-KLM’s cargo traffic in September dipped 3.4 percent year-over-year as a steep decline on the Asia-Pacific network outweighed a small increase in Americas traffic.

The announcement comes a month after Air France-KLM chief executive Pierre-Henri Gourgeon said the airline would no longer seek to be remain among the leading cargo operators because the industry is too cyclical.

Capacity was just 1 percent higher than in September 2010 and the load factor shrunk by 3 percentage points to 64.7 percent. Unit revenue, excluding currency movements, was “slightly down” from a year ago.

The lower September figure, following a 0.2 percent year-on-year decline in August, was largely due to a 6.1 percent drop in Asia-Pacific revenue on 1.4 percent less capacity, and a similar drop in the previously resilient Africa/Middle East region, where capacity was cut by 3.9 percent. The Americas continued to grow, but the year-on-year increase slipped to 0.5 percent from 1.1 percent in August.

Air France-KLM’s performance contrasts with a 1.6 percent increase in September cargo traffic at IAG, the merged British Airways-Iberia carrier, that was driven by a 7.8 percent rise at the Spanish airline.

— Contact Bruce Barnard at brucebarnard47@hotmail.com.

Ferrovial cut its stake in BAA to below 50 percent, in a deal valuing the operator of London Heathrow, Europe’s third largest cargo airport, at about $7.4 billion.

The Spanish infrastructure group said it is selling 5.88 percent of BAA, to U.S. investment firm Alinda Capital Partners for $435 million.

The sale reduces Ferrovial’s stake in BAA, which owns six U.K. airports and Naples airport in Italy, to 49.99 percent from 55.87 percent. This allows it to remove the airport operator’s debt from its balance sheet, reducing the Madrid-based Ferrovial’s net debt from $26.2 billion to $6.9 billion.

New York-based Alinda owns and operates U.S. toll roads including Alabama’s Tuscaloosa Bypass Bridge and the Detroit-Windsor tunnel.

Ferrovial, which led a consortium that acquired BAA for $15.8 billion in 2006, sold London Gatwick airport to U.S.-based Global Infrastructure Partners for $2.24 billion in 2009 after regulators demanded the group sell some of its airports to boost competition in the U.K. industry. The Competition Commission told BAA last week it must sell one of its three Scottish airports followed by the disposal of London Stansted, a freighter and express hub.

— Contact Bruce Barnard at brucebarnard47@hotmail.com.

The transportation piece of the Obama administration’s 2009 stimulus program has paid out more than $7 billion in the first nine months of 2011 to reimburse states for completed projects, according to the Recovery.gov website.

Although the Department of Transportation’s stimulus payouts slowed this year from their peak pace in 2010, the new figures show the 2009 American Recovery and Reinvestment Act continues to inject large sums into state and federal projects. Through Sept. 30, the DOT had reimbursed $31.8 billion since the program got under way about 30 months earlier, up from $24.8 billion at the end of 2010.

That included about $700 million in DOT-issued checks just since the week ending Sept. 2, after states certified last month that more stimulus-backed projects were done. For the entire summer period when road and other transportation construction is busiest, the DOT paid out nearly $3.2 billion from May 28 through September.

The continuing release of $48.1 billion ARRA funds by the DOT is both a timely boost to strapped state budgets and an illustration of how long a major infrastructure program can spend out. President Obama now wants Congress to approve his jobs plan with a big transport construction program, while lawmakers in both the Senate and House are looking for ways to boost revenue for a separate long-term surface transportation bill.

Most of the DOT’s stimulus money went through the Federal Highway Administration, which backed 13,300 projects, of which 9,100 have been finished and another 3,900 are now under way. As of Sept. 30, $47.6 billion had been formally locked in under implementing agreements.

— Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter www.twitter.com/jboydjoc

Bulk chemical hauler Quality Distribution paid $8.5 million for Greensville Transport of Virginia, expanding its intermodal tank container business.

Quality, a $687 million company, said it will merge $8 million Greensville Transport with its eight-terminal Boasso America division once the transaction is complete. Greensville Transport has headquarters in Chesapeake, just outside Norfolk, Va., and gives Boasso access to ports in Virginia, Maryland and South Carolina.

That’s an attractive region, “especially with the planned expansion of the Panama Canal in 2014,” said Scott Giroir, president of Boasso. The acquisition “will allow the company to rapidly expand its geographic coverage,” BBT analyst Kevin W. Sterling said in an Oct. 7 note to investors.

“Quality’s national sales force can quickly get to work selling access to new deep water ports,” he said, expanding Greenville Transport’s business.

In addition to Boasso, Quality operates Quality Carriers, the third largest bulk truckload carrier in the U.S., according to SJ Consulting Group data. Tampa-based Quality had a $9 million net profit in the second quarter on $190 million in total revenue, including service revenue and fuel surcharges.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc

International container traffic during the first six months of 2011 at the Port of Nagoya rose 4.9 percent year-over-year, as auto exports grew 38.3 percent at Japan’s top global trade port and gateway for major auto manufacturers.

Of the 1,945,947 20-foot equivalent container units handled between January and June, exports, up 5 percent year-over-year, accounted for 617,341 TEUs. Imports rose 4.8 percent to 578,606 TEUs during the same period.

The Port of Nagoya handled 22,305,908 tons of international container cargo during the same period, up 4.5 percent from a year earlier.  Container cargo exports rose 1 percent to 10,942,578 tons, while container cargo imports increased 8.2 percent to 11,363,330 tons.

Auto parts exports accounted for 38.3 percent, or 4,249,674 tons, of container cargo trade during the six-month period. Nagoya City is the capital of Aichi Prefecture, home to many auto manufacturers, including Toyota Motor Corp.

The Port of Nagoya’s container cargo exports to the U.S edged up 0.8 percent year-over-year to 1,597,091 tons, while U.S. container cargo imports rose 3.2 percent to 981,234 tons.

Contact Hisane Masaki at yiu45535@nifty.com.

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