JAPANESE shipping giant "K" Line is back in the black, declaring a first quarter fiscal profit of JPY15.8 billion (US$178.6 million) against last year's quarterly loss of JPY14.8 billion.

This year's April 1 to June 30 first quarter profit was drawn on revenues of JPY253.7 billion against last year's quarterly sales of JPY191.9 billion, an increase of 31 per cent. Revenue from containerships stood at JPY112.2 billion, thus contributing JPY9.6 billion to overall profits



"During the first quarter of fiscal year, the world economy continued to gradually recover from the global recession," said the company statement accompanying the results.



Kawasaki Kisen Kasha, better know as "K" Line, attributed global recovery mostly to robust economic growth in China, India and newly industrialised countries.



"In the US, government economic stimulus measures were successful and higher employment fuelled a rebound in personal consumption. In Europe, the economic crisis triggered by the sovereign debt turmoil in Greece shook the value of the euro in currency markets, leading to concern about a ripple effect on a real economy that had been showing signs of recovery. The Japanese economy showed signs of improvement," said the company statement.



Container movement from Asia to North American rebounded as a result of economic improvement in the US, "K" Line said. The volume of cargo bound for North American ports increased six per cent compared with the same period of the preceding year,



"Nevertheless, total [container] volume on North American routes was flat year on year, owning to a decline in cargo volume from North American to Asia as the impact of winter decrease in the number of voyages extended into the beginning of the fiscal year," said the company statement.



"Cargo movement rebounded on European routes as well with volume from Asia to Europe and the Mediterranean increasing 14 per cent in comparison with the same period of the preceding year when volume bottomed out. Cargo volume from Northern Europe and the Mediterranean to Asian increased five per cent as well, and overall cargo volume on European routes increased nine per cent year on year," said the "K" Line statement.



"Combined [container] volume including North South routes and intra-Asia routes increase six per cent. The balance of supply and demand tightened owing to recovery in cargo movement and slow steaming and cargo owners increasingly sought to secure space. As a result the company made progress with restoration of freight rates from depressed levels of the previous year for all routes and recorded higher revenues.



"Although a steep rise in fuel oil prices and other factors put pressure on profits, business returned to profit and the company proactively implemented route optimisation, eco-friendly slow steaming and other cost reduction measures and containership business structural reform implemented the previous fiscal year contributed to profitability improvement," said "K" Line.

JAPAN's Mitsui OSK Lines (MOL) is back in the black, declaring a fiscal first quarter profit of JPY20.8 billion (US$235.3 million) after last year's quarterly loss of JYP13 billion.

This year's April 1 to June 30 first quarter profit was drawn on revenues of JPY396.9 billion against last year's quarterly sales of JPY297.4 billion, an increase of 33 per cent. Revenue from containerships stood at JPY146.8 billion, thus contributing JPY8.5 billion to overall profits.



"In the global economy during the first quarter of the fiscal year, while developed countries embarked on a recovery trend, albeit modest, China and other emerging countries continued their strong growth," said a MOL statement accompanying the results.



"In the US, despite restrictions caused by high jobless rates and attrition in residential property values, the economic recovery slowly marched ahead thanks to the Obama Administration's export expansion policy," the statement said.



"Europe's exports recovered, benefiting from a re-emergence of the external economy and the depreciation of the euro, however internally the a budget problem manifested itself along with instability in the financial sector that resulted in low growth, the statement said.



"Regarding containerships, we have optimised the fleet size by returning chartered ships and laying up or scrapping surplus ships from the previous fiscal year along with various measures such as a reduction in fuel costs by slow steaming and the optimisation of our organisation and staff both in Japan and overseas to enhance our cost competitiveness.



"In the first quarter we not only reduced cost through such measures, but also revised and expanded our routes resulting in a profit buttressed by vast improvement in cargo trade and freight rate market conditions on the heels of the global economic recovery," the MOL statement said.

A 314,016-TON very large crude oil tanker, the M Star, was apparently attacked by a bomb or rocket, which damaged its hull in the Strait of Hormuz between Oman and Iran.

"The degree of hull damage is under investigation, but no serious injury was reported, although one of a crewman was slightly injured. But no oil leaked," said MOL, according to American Shipper.



Lloyd's List spoke with the vessel's master, Manoj Mathew, who said that the explosion was severe enough to have blown off five doors on the starboard side of the vessel's accommodation and damaged the starboard lifeboat.



While the explosion seems more than a grenade can do, newer RPG models can penetrate tank armour. If successful, a likely result would be a fire and an oil spill, bringing about environmental damage.



One the 15 Indian and 16 Filipino crewmen - the second mate, suffered cuts to his hand from flying glass. Capt Mathew said it was still unclear what caused the blast, but that an inspection was scheduled for today.



No one claimed responsibility, and industry sources pointed out that the position of Marshall Islands-flagged ship was beyond the usual range of Somali pirates. Iran's semi-official Fars News Agency attributed the explosion to an "imbalance of inert gases".*



The ship took on oil cargo in the United Arab Emirate on July 27 and was headed for Japan with 270,204 tonnes of crude.

DENMARK's AP Moller-Maersk has decided to strengthen its presence in Hong Kong by significantly increasing its fleet under the Hong Kong flag.

With its recent decision to register an additional 22 newbuildings, a total of 39 vessels in the AP Moller-Maersk Group will be under Hong Kong flag. Maersk Shipping Hong Kong (MSHKL), one of the group's ship-owning entities and Safmarine, a member of the group, will own the newbuildings, a Maersk statement said.



This comes after in the first half, the ownership of seven large container vessels, including four 6,700 TEU and two 8,600 TEU ships, have been transferred to MSHKL.



AP Moller-Maersk has also decided to assign to Hong Kong a further 14 new large container vessels (SAMMAX 7,500 TEU & WAFMAX 4,500 TEU class) to MSHKL as well as eight Safmarine vessels (five multi-purpose vessels and three WAFMAX 4,500 TEU container ships).



"We carry out the expansion in recognition of Hong Kong's position as a leading international maritime centre, its economic attractiveness to shipowners and its wide recognition as a quality flag-state with efficient service," said Dipak Dash, managing director of Maersk Shipping Hong Kong Company.

CHINA Merchants Americold Logistics Company Limited (CMAC), the 51-49 joint venture established between China Merchants Holdings (International) Co. and Americold Realty Trust, has completed the acquisition of 70 per cent of China Merchants International Cold Chain (Shenzhen) Co Ltd (CMCC) from CMHI.

"The establishment of CMAC with Americold, and the acquisition of KXL and injection of CMCC enables CMHI to solidify CMAC as China's premier third-party temperature-controlled logistics provider, operating an integrated nationwide platform across 15 cities in China," said CMHI chairman Fu Yuning.



"As CMHI's platform for cold chain services, CMAC plans to develop and promote cold chain logistics services in the broad consumer goods market in China," said Dr Fu.



The joint venture also signed a definitive agreement to acquire KangXin Logistics (KXL) from Rich Products Corporation for HK$700 million (US$90 million) for both transactions. CMHI and Americold will fund these transactions in accordance to their respective proportional share ownership in CMAC.



KXL, a joint venture subsidiary of Rich, is a third-party cold-chain logistics (3PL) company, serving multi-national food companies as well as Rich's own warehousing and distribution needs in China.

DP WORLD has announced that volumes through its 50 terminals has increased 16 per cent in the first half of the year to 23.7 million TEU.

The Dubai government-controlled company posted volume growth of seven per cent, to 13.2 million TEU, at consolidated terminals.



"These first-half volumes, along with the continuation of cost management, will lead to an improvement in first-half profit after tax against the same period last year," said chief executive officer Mohammed Sharaf.



First half net profit increased by 10 per cent compared to the same period last year to reach AED55 million (US$15 million), while revenue totalled AED557 million, up 15 per cent compared to a year earlier.



"Whilst uncertainty remains over the sustainability of trade volumes reported in the first half of the year, we currently expect to deliver full-year results in line with expectations," Mr Sharaf said.



Volume growth in the first half of 2010 was largely driven by DP World's terminals in Asia and Australia, although some European facilities also started to recover. Volumes at the flagship terminals in the UAE rose by three per cent year on year, reports London's International Freighting Weekly.



DP World anticipates that growth in container shipping will come chiefly from Asia this year, with the company aiming to start operations at terminals at Vallarpadam in India and Karachi, Pakistan.

THE KOREA Marine Transport Co (KMTC) and Sinotrans plan to commence a new joint intra-Asia service connecting ports in South Korea, China and Indonesia, called the KCI service.

The KCI service will call at Busan, Kwangyang, Shanghai (Waigaoqiao), Ningbo, Hong Kong, Jakarta, Singapore, Kaohsiung, returning to Busan.



The first sailing will be undertaken by the 1,702-TEU Ling Yun He operated by Sinotrans that is scheduled to depart from Busan on July 27. KMTC, the 1,661-TEU Manuela and the 1,585-TEU KMTC Hong Kong will operate the following two vessels deployed on the service, said Alphaliner.

CONTAINER shortages, soaring rates resulting in rising supply chain costs threaten the global recovery of international trade, declared John Lui, chairman of the Singapore-based Asian Shippers' Council.

"The US recovery is not strong enough to absorb price increases and the value of the euro has fallen. I think the rising cost of moving cargo, which must be passed on to buyers, threatens the trade recovery. We're also seeing some companies moving production closer to [end] markets. That's normal when freight costs are high and so unpredictable," said Mr Lui.



"It's hard to prove, but lay-ups, slow-steaming make it obvious that it is collective action that has enabled the lines to charge higher rates and surcharges. Artificial shortages are helping the lines make good their losses," he said.



"The recovery has been much faster than expected. Business has recovered, but the economy overall is still uncertain. Orders are smaller and more short-term than pre-crisis," he said.



"Freight rates started to rise before any sign of recovery," Mr Lu told London's International Freighting Weekly. "This is not normal. Because of the crisis, the shipping lines have started to work more closely and, in my view, this is the action of a cartel that has pushed shipping rates and surcharges artificially high.



"Shippers are suffering higher and higher shipping costs already, reflecting cartel movement rather than market forces. The shortage of containers is another factor to the advantage of shipping lines, but actual capacity is still in oversupply," said Mr Liu.

MARSEILLES' CMA CGM has received delivery of the 11,400-TEU CMA CGM Leo from South Korea's Hanjin Heavy Industries yards with its sister vessel CMA CGM Pegasus expected next month.

The 11,400-TEU ship will fly the Maltese flag and is one of the first vessels of the group to receive the new Bureau Veritas classification notations Clean Ship C and FORS.



The CMA CGM Leo and the CMA CGM Pegasus will join the CMA CGM Christophe Colomb and CMA CGM Amerigo Vespucci on the FAL 5 service operated between Asia and Europe. This key market has been steadily growing for months and registered a 22 per cent growth since the beginning of the year.



"The delivery of the Leo and the Pegasus will allow CMA CGM to meet the steady customer demand and strengthen its leading position on the Asia-Europe market while taking into account environmental stakes according to the group's commitments and values," said Asia-Europe vice president Nicolas Sartini.



The port rotation will be Ningbo, Shanghai, Shenzhen-Yantian, Tanjung Pelepas, Port Klang, Le Havre, Hamburg, Rotterdam, Zeebrugge, Port Klang and Singapore.

DUBAI's global transportation and logistics company, Aramex, second quarter profits increased 10 per cent year on year to AED55 million (US$14.9 million) while first half profits came in at AED102 million, up 10 per cent year on year.

"For the second consecutive quarter, company revenues witnessed double-digit growth, reaching AED557 million, a rise of 15 per cent from the AED485 million registered in the same period of 2009.



These results were mainly due to an increase of business and strong growth in freight services in Europe and India. Building on the solid performance achieved in the first quarter of 2010, the company also achieved a high net profit margin of 10 per cent in the second quarter as it continued to focus on cost efficiency," Aramex said in a statement.



Said Aramex founder and CEO Fadi Ghandour: "Supported by our strong cash position, we remain focused on investing and expanding in emerging markets such as those in Africa, south east Asia and CIS countries."

DB SCHENKER Rail Polska is to invest EUR22.5 million (US$29.24 million) in the Baltic Sea Polish ports of Szxzecin and Swinousjscie by expanding facilities in the addition of new wharfs and cranes by 2018 with the ports' authority.

DB Schenker Rail Polska CEO Hans-Georg Werner said the company would buy two gantry cranes in Szczecin and another in Swinoujscie, thus increasing the two ports' transshipment capacity.



The company transships containers, less-than carload freight, paper and cellulose, granite, steel and other goods at the ports and carries out a project cargo business and will, with the addition of new IT systems and roads, begin operating from the new container terminal in autumn of this year. Annual capacity at Szezecin will double to 220,000 TEU.



By 2018, a total of EUR16.5 million will have been invested in the expansion. As a result, space and equipment will be able to be restructured for conventional transshipment.



A modern Liebherr crane is being installed at the port of Swinoujscie. A contract with Polish Trade Services of the agricultural production and food producer Bunge International Group will secure transshipment for the long term. The crane can move 10,000 metric tons a day. The terminal expansion will create capacity for an additional few hundred thousand metric tons each year. The first ship carrying imported products is scheduled to pass through the port in mid-2011.



"These investments in our ports are part of our plan to develop transportation over the long term," said Christian Schreyer, DB Schenker Rail Polska management board member responsible for logistics. "We are expecting port hinterland rail transports in particular to increase as a result of the port capacity expansion."

KUWAIT's global logistics provider, Agility, has announced it will commence operating an Australian domestic shipping service between Melbourne across the Bass Strait to Bell Bay in Tasmania in early August.

The service will be operated by Agility Shipping Pty Ltd, a joint venture between Agility Logistics Pty Ltd. and Transworld Marine Express Pty Ltd. The joint venture agreement between the two parties was signed in Melbourne on July 23.



The thrice weekly service will be served by Australian-flagged and Australian crewed vessels, with the first being 516-TEU MV Tassie Bridge a second vessel added later in the year depending on demand for frequency of service.



An agreement in principle between Agility and Tas Rail has been reached to launch an intermodal service from Bell Bay to the Tasmanian capital of Hobart in the last quarter of 2010.



"This is a major step for Agility in Australia to meet growing demand from our customers for a reliable scheduled service across the Bass Strait connecting Melbourne and Bell Bay, Tasmania. We are also very proud that we will be supporting the national maritime sector as the vessels will be flying the Australian flag, with an all Australian crew," said Mick Turnbull, CEO, Australasia and North Asia.



"The partnership with Agility means that we can leverage their international expertise in freight and logistics. When combined with Transworld's strong maritime industry credentials, we will be able to deliver a world-class service to Australian customers across the Bass Strait," said Transworld Marine Express managing director Ivan Colaco.



Agility Shipping will operate from offices in Prohasky Street, Port Melbourne, headed up by Paull Van Oost, formerly Agility projects manager and Glen Colaco, to be joined by other industry-experienced professionals in the near future.



Agility Shipping's vessels will operate on fixed berthing windows at Webb Dock 4 in the Port of Melbourne and Bell Bay in Tasmania. Stevedoring and container depot operations will be conducted by Patrick Stevedores in Melbourne and by ANS Stevedores in Bell Bay, both under long-term agreements.

AMERICAN AIRLINES parent, AMR Corp (AMR), has agreed pay US$5 million to shippers to settle a New York class-action suit seeking damages for global price-fixing, and produce evidence to charge other carriers engaged in the scheme, reports Bloomberg.

AMR is the first American carrier to settle during six years of investigations into alleged collusion into the setting of fuel surcharges by multiple airlines since 2006, reports Dow Jones.



Fort Worth-based American does not admit culpability and was only added as a defendant in the case to seek court approval for the deal, AA spokesman Tim Wagner told Bloomberg.



"American Airlines has done nothing wrong," Mr Wagner said. "Litigation is an expensive and uncertain proposition and avoiding the cost and the inconvenience of trial made paying the settlement the best financial decision."



American promises to provide witnesses, documents and electronic data to help shippers in similar cases in Canada, Australia, South Korea and other countries, said the shippers' lawyer, Michael Hausfeld, of Hausfeld & Co LLP.



The deal was made before federal court in Brooklyn, New York, and is the first time an US airline has agreed to help prosecute a cartel outside the US, said Mr Hausfeld.



"It is an important step forward for shippers in Europe and around the world and demonstrates that companies can act responsibly to resolve competition disputes without resorting to excessive or protracted litigation," he said.



Settlement talks with American started after the EU in 2007 gave the carrier a so-called statement of objections related to the cartel, Hausfeld said in court papers.



Hausfeld later concluded that "while AA did face some risk of liability, it would be difficult for plaintiffs to obtain a judgment against it, given the evidence," according to the court filing.



More than a dozen airlines have already settled with regulators, paying more than $1.5 billion in fines amid probes into fuel surcharges by regulators in Europe, North America and Asia that have also ensnared freight forwarders, US railways and ocean shipping companies.



British Airways last week issued legal proceedings against 32 airlines - including AMR, its alliance partner, in an attempt to have them share the burden of any damages it may have to pay arising from a cargo price-fixing suit it faces in London.

AZERBAIJAN AIRLINES has signed a deal with Boeing to substitute two Next-Generation 737s for one 767-300ER (extended range) and two 767 Freighters, a new model type for the Baku-based carrier, Boeing announced at Britain's biannual Farnborough Air Show.

"With our centralised geographic location, Azerbaijan is becoming a busy hub in the region between east and west and north and south," said Jahangir Askerov, president of Azerbaijan Airlines. "We are capitalising on this development by expanding our long-haul passenger fleet and growing our cargo business with the proven efficiencies of the 767 Freighter."



Azerbaijan Airlines has a total of eight Boeing airplanes on order: two 767-300ERs, two 767 Freighters, two Next-Generation 737s and two 787-8s.



Said Boeing vice president Marlin Dailey: "With the economic recovery gaining momentum at various speeds around the world, customers are making changes to their fleets. We have worked with Azerbaijan Airlines to make changes to its order book that meet its needs."

MEMPHIS express giant FedEx increased its profit outlook for the quarter ending in August despite its earlier gloomy summer forecast with recovery of overseas shipments driving growth 20 per cent, said the company's chief financial officer Alan Graf.

Wells Fargo Securities economist said international priority shipments growth will be a great benefit to the air freight sector. "Growth in Asia has been red hot, fuelled by the tech sector and iPhones and handheld devices," Mark Vitner told Bloomberg.



In response to air freight demand on longer routes to Asia the company will buy six more Boeing 777F at a cost of US$1.51 billion as taken from list price. Recession stops on matching employee contributions to 401(k) retirement accounts will be restored given the robust growth in the quarter.



According to a Bloomberg survey taken from an average of 17 estimates analysts projections for the third quarter FedEx earnings were at $1 a share off its present range of $1.05 to $1.25 a share, and almost double its earnings year on year at US$181 million.