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Summary for January 7 - January 11, 2008:
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Monday, January 07, 2008

Modest growth for Chinese toymakers forecast

 HONG KONG and mainland China toymakers in 2008 should still be able to maintain the modest export growth rates achieved in 2007 in spite of rising costs, product safety concerns, and slowing global economies, according to a Jan 4 article in the South China Morning Post.

 Toys Manufacturers’ Association of Hong Kong Executive VP Yeung Chi-kong spoke with “cautious optimism” and forecast that shipments would increase about 3%, consistent with last year’s almost 3% growth, when HK$160bn worth of Chinese-made toys were exported for sale to other countries.

 The concerted efforts by toymakers to improve the reputation of mainland-made products should have a good effect, the paper said.

 Some of Hong Kong’s 4,000 toy companies with factories across the border are anticipating a 15% jump in costs, however, largely because of rising oil prices, an accelerating yuan, and higher raw material costs and wages, the paper said.

 Those factors combined with a new labor contract law and an increase in corporate income rates could force “hundreds of smaller players” to go broke, the paper quoted Hong Kong Toy Council Chairman Lawrence Chan as saying.

 To restore merchandisers’ and consumers’ confidence, a four-day toy festival will be held for the first time in Hong Kong this week in conjunction with the Hong Kong Toys and Games Fair, the world’s second-largest fair of its kind after that of Nuremberg in Germany.

 “We want to tell global consumers that Chinese-made toys are safe and its safety standards are improving,” Chan said.

 Web site:

 South China Morning Post

FedEx responds to IRS ruling

 FEDEX Corp. Jan 3 announced that, in response to a tentative assessment by the Internal Revenue Service in December regarding the classification of owner-operators at FedEx Ground, the company is preparing to meet with the IRS audit team.

 The purpose of the meeting, said FedEx, will be to review their tentative assessment and to provide an initial response. It is expected that the meeting will occur in the spring of 2008 and that a final resolution of this matter will not occur for some time.

 FedEx also announced that some reporting concerning this matter has been inaccurate.

 “We believe that we have strong defenses to the IRS’s tentative assessment and will vigorously defend our position, as we continue to believe that FedEx Grounds owner-operators are independent contractors and that no loss is probable,” the company said.

 The IRS has tentatively concluded that FedEx Grounds pick-up-and-delivery owner-operators should be reclassified as employees for federal employment tax purposes. The IRS has indicated that it anticipates assessing tax and penalties of $319mn plus interest for 2002 against FedEx.

 Web site:

 FedEx Corp.

 Nominations open for logistics service award

 THE COUNCIL of Supply Chain Management Professionals is now accepting nominations for CSCMP’s 2008 Distinguished Service Award.

 CSCMP is looking for “an academic, consultant, or practitioner who exemplifies sustained, consistent, and excellent service to the development of the discipline of supply chain management.”

 This award “is the highest honor that can be bestowed upon an individual for achievement in supply chain management,” according to the announcement.

 Nominations will be considered by CSCMP’s 2008 Distinguished Service Award Selection Committee, who will evaluate all nominees based on the following criteria: a distinguished record of contribution, recognition as a leader, and recognition as an innovator.

 The award recipient will be honored at the 2008 CSCMP Annual Global Conference Keynote Session in Denver, CO.

 Nominations will be accepted through Apr 1, 2008, according to the announcement. Nominations may be submitted online at the association’s Web site.

 Founded in 1963, the Council of Supply Chain Management Professionals is the preeminent association for individuals involved in supply chain management. CSCMP provides educational, career development, and networking opportunities to its more than 9,000 members and to the entire profession.

 Web site:

 Council of Supply Chain Management Professionals


Tuesday, January 08, 2008

Maersk Line reorganizes, RIFs up to 3,000

The three drybulk vessels are the Genco Charger

 MAERSK Line, the container shipping division of the AP Moller-Maersk Group, Jan 8 announced that the company will undergo a reorganization with the goals of “focusing more closely on customers’ needs” and “returning to sustainable profitability.”

 The global organization will undergo a reduction in force of 2,000-3,000 positions out of 25,000, according to the announcement.

 The main element of the reorganization will be to reduce regional organizations into smaller teams and push decision-making out to the countries and closer to the customers, the company said.

 The company said it will focus on a long-term strategy comprising four core elements: profitable cargo, most reliable product, more responsive service closer to the customer, and reduction in complexity and cost.

 A new management team has been established to take responsibility for the delivery of the strategy, the company said. The reorganization is expected to be completed by April 2008.

Nils S. Andersen, CEO of the AP Moller-Maersk Group, said he “strongly supports” Maersk Line’s new strategy.

 “The new organization will be more lean and effective and represents an important step forward towards improving the profitability of our business. We regret having to reduce our number of employees, but consistent with our group values, the redundancies will be done in a responsible manner.”

 Web site:

 Maersk Line

Port of Seattle under federal criminal probe

 THE US Justice Dept. has launched a criminal investigation of the Port of Seattle, State Auditor Brian Sonntag disclosed Jan 7 while releasing a letter his office received Jan 4 from US Attorney Jeff Sullivan.

 Multiple federal agencies, including the US Attorney’s Office, the FBI, and the US DOT Office of the Inspector General, could be involved in the probe, according to information received by his office, Sonntag said.

 The announcement of the investigation follows the release Dec 20 of the state auditor’s 334-page audit report that blasted the port for “wasting” $97.2mn in taxpayer money during construction projects and contracts and for being “vulnerable to fraud, waste, and abuse.”

 Much of the audit focused on contracts related to construction of the third runway at Seattle-Tacoma International Airport, which is run by the Port of Seattle.

 Port CEO Tay Yoshitani, who took over from former port CEO Mic Dinsmore a year ago, responded Jan 6 to the state audit with a public letter disputing that the port wasted taxpayer money during construction projects and asserting that the port has “zero tolerance” for fraud.

 The port commissioners will hold a meeting at 1 p.m. today in its Pier 69 headquarters to allow a public hearing and testimony regarding the state auditor’s report.

 Web site:

 Port of Seattle

Savi Networks hits milestone

 SAVI Networks Jan 8 announced it recently recorded the 25,000th commercial cargo shipment tagged with standards-based electronic seals (e-Seals) moving through its global wireless network, which is set up at port facilities handling 20% of world trade.

 The SaviTrak information service monitors in real time the location and security status of commercial cargo shipments.

 The radio frequency identification (RFID) e-Seals enhance security visibility, speed clearance by their countries’ Customs authorities, and reduce in-transit inventory costs, the company said.

 “E-Seal–enabled information networks are a key step toward implementing Customs’ ‘green lanes’ that add extra security, new velocity to global supply chains, and greater efficiency for our customers,” said Neil Smith, CEO of Savi Networks.

 Smith added that the US Dept. of Homeland Security’s recent announcement that it plans to mandate mechanical seals on all containers coming into the United States after Oct 15, 2008, is an important step on the path to safer ports and borders.

 Smith views the pending mechanical seal mandate as a logical first step toward widespread deployment of ISO 18185–based e-Seals, which are based in part on the international standard for mechanical seals, ISO 17712, the company said.

 Web site:

 Savi Networks


Wednesday, January 09, 2008

Retail box traffic up

 TRAFFIC at the nation’s major retail container ports in December rose above the previous year’s level for the first time since mid-summer, according to the monthly Port Tracker report released Jan 8 by the National Retail Federation and Global Insight.

 December was estimated at 1.35mn TEUs, up 3.3% from December 2006.

 “Retailers were managing their inventories very carefully during the holiday shopping season, and their efforts worked well,” said Jonathan Gold, VP for supply chain and customs policy at the NRF.

 “Month-to-month numbers are declining as we head into the winter slow season, but we’re starting to see increases again when year-to-year numbers are compared,” added Gold.

 “All the US ports we cover are operating without congestion from the harbor to the gate and are rated low for congestion through the spring,” Global Insight Economist Paul Bingham said.

 “Rail performance measures continued to be adequate in December. Intermodal rail operations are also performing adequately and are expected to continue to do so over the next six months,” added Bingham.

 Web sites:

 National Retail Federation

 Global Insight

UPS expands air freight offerings

 UPS this week is launching a simplified global portfolio for shipping air freight, including a substantially expanded express freight option with guaranteed door-to-door service, the company announced Jan 7.

 The feature item in the expanded international express service, called UPS Express Freight, provides “guaranteed time-definite, overnight-to-three day door-to-door delivery including routine customs clearance to major global metropolitan areas,” UPS said.

 For less time-sensitive global movements, UPS offers two non-guaranteed alternatives: UPS Air Freight Direct, which is a one-to-three day airport-to-airport service, and UPS Air Freight Consolidated, which is a three-to-five day airport-to-airport service.

 Both services are available worldwide and offer pickup, delivery, and customs clearance as optional features. Freight shipments may move on either UPS or third-party aircraft, UPS said.

 With the new services, UPS says, it now becomes the “only transportation and supply chain provider offering guaranteed integrated air freight services in a single portfolio.”

 Commented Dan Brutto, president, UPS International, “We have designed an industry-leading suite of services that plays to the strengths of each air network and produces a higher degree of choice and predictability than any other company in the air freight industry.”

 Web site:



Aker starts work on 11th tanker ship

 STEEL cutting has begun on the next tanker vessel being constructed at Aker Philadelphia Shipyard, the company announced Jan 7.

 The 11th out of a series of 12 double-hulled, 46,000 dwt product tankers brings the number of vessels currently under construction at the yard to four. The ship is scheduled for completion in 2009.

 The first three vessels in the series of 12 were delivered in 2007.

 Upon completion, the 12 tankers will be owned by Aker American Shipping and bareboat-chartered to Overseas Shipholding Group Inc. To date, 11 of the 12 tankers in the build program are under signed time charter agreements between OSG and major oil companies and refiners, Aker said..

 Aker Philadelphia Shipyard is a “leading US commercial shipyard constructing vessels for operation in the US Jones Act market. The state-of-the-art shipbuilding facility has earned a reputation as the preferred provider of oceangoing merchant vessels with a track record of delivering quality ships,” the announcement said.

 Aker Philadelphia Shipyard is a member of the Norwegian-based Aker family of global companies in the marine and fisheries fields.

 Web site:

 Aker Philadelphia Shipyard


Thursday, January 10, 2008

ILWU Canada revokes port workers edict

 THE CANADA Federal Court of Appeal Jan 7 dismissed the International Longshore and Warehouse Union application to stay the Marine Security Transportation Safety Clearance Program.

The ruling means that the Canada Industrial Relations Board decision, which ruled the refusal by the union to participate in the program to be an illegal strike action, is now in effect.

 In response, ILWU Canada, in a release posted on its Web site, revoked its directions to the members of ILWU Locals 500, 502, 514, and 517 to not complete the Marine Transportation Security Clearance application forms.

 The ILWU, which represents longshoremen working at container facilities in British Columbia, had been asking the courts for a stay of the program until its validity under the Canadian Charter of Rights and Freedoms could be determined by federal courts.

 ILWU members opposed the program because it requires workers to submit personal information, including fingerprints and photographs, that could then be turned over to foreign governments.


The ILWU is currently in negotiations with the BC Maritime Employers Association for all longshoremen working at British Columbia container-handling facilities.

 Web site:

 ILWU Canada

Industry launches public awareness campaign

 THE GLOBAL container shipping industry Jan 10 launched a major public awareness drive with the formation of the Container Shipping Information Service.

 Formed by 24 of the world’s leading container shipping companies, the initiative is a first for the industry.

 The aim is to increase public understanding and appreciation worldwide of the benefits and impact that this hitherto relatively unknown industry has on daily life, the announcement said.
As a first step, CSIS has created a public website

( designed to appeal to a broad audience. Its features include a “Did You Know” section and a “Jargon Buster” section that decodes shipping terms.

 The CSIS is engaged with other major industry trade bodies and aims to complement their existing activities by providing information that is more relevant to a broader public audience.

 “The choice of goods that consumers have and their availability is largely down to the container shipping industry. However the wider world is not, on the whole, aware of this,” commented Ron Widdows, CEO, APL.

 “We have created this communication service to help people outside the industry understand the benefits of what we do.”

Brian Mannelly new Tacoma planning director

 The Port of Tacoma Jan 9 announced it has promoted Brian Mannelly to director of port planning.

 In this position, Mannelly oversees port capital improvement projects, including terminal design and facilities development. In addition, he is responsible for long-range port planning, road and rail system planning, and policy coordination with other municipal, state, and tribal planning officials.

 “Brian brings an innovative, energetic approach to planning the Port’s future,” said Lou Paulsen, Port of Tacoma Senior Director of Facilities Development. “While his focus is solidly on the success of our customers, Brian has a long-term perspective of what is most beneficial for the community.”

 A LEED Accredited Professional through the US Green Building Council, Mannelly graduated from Arizona State University in 1995 with a Bachelor of Science in Urban and Regional Planning. He earned a Master of Planning from the University of Virginia in 1998.

 Mannelly joined the port in 2005 as a planning specialist and was promoted to manager of terminal planning in 2007. He was previously employed in private engineering consulting by Vanasse Hangen Brustlin Inc. (VHB) of Boston.

 Web site:

 Port of Tacoma


Friday, January 11, 2008

Prison sentence for chief engineer

 THE FORMER chief engineer of the M/V Tanabata was sentenced in US District Court Jan 10 in Baltimore to six months in prison for “conspiracy to make illegal discharges of oily waste and lying to the Coast Guard.”

 At trial, it was proven that the M/V Tanabata, an American-flagged car-carrier ship based in Baltimore, had a removable bypass pipe that was used to discharge oily waste without the use of an oily-water separator, a required pollution control device on ocean-going vessels.

 According to papers filed in court by the prosecutors, Mark Humphries deliberately bypassed the pollution prevention equipment on the Tanabata, then concealed the crime by making false entries in the ship’s official Oil Record Book, a required log regularly inspected by the US Coast Guard.

 This practice “involved a number of subordinate crew members of the engine department, including students at US maritime academies receiving on-the-job training as ‘Cadets,’” the announcement said.

 The sentence was announced by Ronald J. Tenpas, Assistant Attorney General for the Justice Dept.’s Environment and Natural Resources Division, and Rod J. Rosenstein, US Attorney for the District of Maryland.

 Web site:

 US Justice Dept.

POLA/POLB to consider cargo fee

 THE LONG Beach and Los Angeles Boards of Harbor Commissioners, in a joint meeting on Monday, Jan 14, will consider a cargo fee that would generate $1.4bn for transportation projects to improve traffic flow and air quality in the harbor area.

 The fee would be in addition to one enacted in December to help fund the ports’ Clean Trucks Program, according to the press release.

 It is anticipated that the charge would be $15/loaded TEU for seven years, but it “could vary depending on how quickly the ports move forward with their projects,” the announcement said.

 The proposed fee would be assessed on every loaded 20-TEU cargo container entering or leaving any terminal by truck or train beginning Jan 1, 2009.

 Funds generated by the infrastructure cargo fee would be used to match Proposition 1B funds, which California voters approved in 2006 to help pay for major transportation and air quality improvement projects.

 Together, the cargo fee and Proposition 1B funds would finance about $3bn in improvements, the announcement said.

 Web sites:

 Long Beach

 Los Angeles

First Industrial in 261-acre Sea/Tac deal

 FIRST Industrial Realty Trust Inc. Jan 10 announced that it has acquired a 261-acre land site in DuPont, WA, serving the Seattle/Tacoma region.

 The land acquisition and development are being completed through First Industrial’s Strategic Land and Development Joint Venture, FirstCal 3, with the California State Teachers’ Retirement System (CalSTRS), the second-largest public pension fund in the nation.

 First Industrial plans to develop “First Park Northwest Landing” on the site, which is along the I-5 corridor with excellent access to the major cities in the area: Seattle, Tacoma, Olympia, and Portland.

 Initial plans call for the enhancement of the park’s infrastructure through the addition of new roads and improved utilities.

 Development plans accommodate build-to-suits for corporate customers and select land parcel sales to strategic customers. The site will offer customers distribution and light industrial space.

 First Industrial opened its Seattle/Tacoma office in 2007 and announced its first land acquisition in this market with the development of the 780,000-sq-ft “First Park Meridian Campus” in Lacey, WA.

 Wayne Reisenauer, development manager, leads First Industrial’s development team for both business parks in the region.

 Web site:

 First Industrial Realty Trust Inc.

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