Here are three stories that are a growing concern. These stories are concerning because it shows freight volume is very low still and carriers are having to charge more (inflationary). They are in debt and cutting employees or on the verge of bankruptcy. Scary stuff in my industry that I cannot find work in. Sucks
OOCL Joins ‘Emergency Revenue’ Move
Thomas L. Gallagher | Dec 18, 2009 3:40PM GMT
The Journal of Commerce Online - News Story
Carrier announces rate increase in line with Transpacific Stabilization Agreement
Orient Overseas Container Line affirmed it would join the “emergency revenue program” announced Wednesday by the Transpacific Stabilization Agreement, of which it is a member.
While TSA has no enforcement powers, its voluntary guidelines generally indicate the direction its members will take. CMA CGM, another member of the group, announced Thursday it would raise rates in line with the recommendation.
Saying that trading conditions in the Asia, Indian Subcontinent to U.S. trade are “subject to unacceptable rate levels and the situation is unsustainable in the longer term,” OOCL announced Thursday it would increase fees effective Jan. 15.
The increase will be $320 per 20-foot equivalent unit, $400 per 40-foot equivalent unit, $450 per 40-foot high cube, and $505 per 45-foot high cube.
In a further announcement on Friday, OOCL said the same emergency revenue charge would apply effective Jan. 15 to all dry and reefer shipments from Honk Kong, Macau and South China to the United States.
The increase is an “interim charge and set to expire upon contract renewal,” the carrier said.
TSA on Oct. 6 announced that in service contract negotiations next spring, its members will seek to increase freight rates by $800 per FEU to the West Coast and $1,000 per FEU to the East Coast. Intermodal shipments moving by rail to interior destinations would also be increased by $1,000. Negotiations normally take place in March and April, with the new service contract rates taking effect on May 1.
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Story two is about our nations largest LTL carrier YRC worldwide. They are not doing well at all.
YRC Warns of Low Liquidity
William B. Cassidy | Dec 17, 2009 9:42PM GMT
The Journal of Commerce Online -
Debt-for-equity swap must be done Dec. 31, company says, to avoid 'unsustainable' position
YRC Worldwide sounded a warning over its debt-for-equity swap today as it raced to avoid a bankruptcy filing, saying it is critical that the company complete the deal before Dec. 31.
Without access to a $106 million pool of capital dependent on the exchange, "the company's liquidity position would become "unsustainable" when $19 million in interest and fees comes due Dec 31.
That probably would force the company to file for Chapter 11 bankruptcy protection from its creditors as it attempts to reorganize, financial analysts said.
The $19 million in interest and fees would be deferred if the swap is approved. The deadline for the exchange today was moved to Dec. 23.
The warning came as YRC lowered barriers to the deal, dropping a bondholder participation requirement from 95 percent to 70 percent for some notes and 85 percent for others. But in order to do that the company had to accept limits on its access to capital.
Until the exchange is approved, it will only be able to draw on $50 million from its revolver reserve -- not the full $106 million available under its credit agreement.
Some bondholders are backing away from the deal. On Dec. 15, YRC Worldwide said 75 percent of its bondholders had tendered notes, but today the figure fell to 57 percent.
If the deal is successful, the company said it would still need about $30 million in unsecured financing by March 1 and an additional $15 million in April to retire outstanding notes.
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This is another troubled steamship company on the ropes with $5.6 billion in debt.
Saadé steps down as CEO, paving way for deal with creditors
CMA CGM's bankers on Friday agreed to grant the financially troubled container line a $500 million credit line after Jacques Saadé, the French ocean carrier's founder, agreed to restructure corporate leadership and step down as chief executive officer.
CMA CGM said the cash, which will be available in January, would enable the French carrier to pursue negotiations to restructure its $5.6 billion debt and raise fresh capital from new investors.
The agreement with creditors also "is expected to facilitate ongoing discussions with ... Korean shipyards concerning the cancellation or the postponement of ships on order," CMA CGM said.
CMA CGM, the world's third-largest container carrier, has 59 ships on order and is said to be seeking to cancel contracts with South Korean shipyards for 15 vessels in the range of 3,600 20-foot-equivalents.
CMA CGM said it called an extraordinary shareholders' meeting Dec. 23 to approve changes in the company's legal structure with the creation of a new board chaired by Saadé.
Saadé will become non-executive chairman supported by two new directors, including Denis Ranque, former head of European defense contractor Thales.
The Marseilles-based company will propose the appointment of Philippe Soulie as CEO, flanked by Farid Salem, Rodolphe Saadé and Jean-Yves Shapiro as chief operating officers.
It would be the first time CMA CGM appointed a CEO from outside the company. Soulie is a veteran French businessman who runs Cnim, a Marseilles-based construction company.
CMA CGM said it plans to raise cash by selling stakes to new investors in the second quarter of 2010.
The company did not identify the potential investors, but they are thought to include Louis Dreyfus Armateurs, a French bulk ship owner, French private equity group Butler Capital Partners, and Los Angeles-based Apollo Management, the owner of CEVA Logistics of the Netherlands.
