Starbucks in court to sever Kraft distribution deal
Starbucks told a federal judge on Thursday that Kraft is unfairly preventing it from ending their 12-year-old distribution agreement, where Kraft dispenses Starbucks' products to grocery stores and other retail outlets, hampering its attempt to move its distribution operation to a new partner, privately held Acosta.
The coffee shop giant said Kraft's court-issued injunction against Starbucks, filed in early December, will negatively affect its bottom line.
Starbucks, which earlier this week unveiled a new logo, has accused Kraft on numerous occasions of mismanaging the distribution of its products, including store displays and marketing, and failed to take measures to "address the erosion of Starbucks market share."
Starbucks said its grocery sales fell to 26.7% in early 2010, from 32.7% in 2004.
Kraft's spokesman Mike Mitchell countered to Reuters that Starbucks' grocery sales declines in 2008 and 2009 coincided with the overall economic downturn and during a time when coffee competitor Dunkin' Donuts "aggressively" marketed its own coffee products.
The National Retail Federation announced it has named David French as senior vice president for government relations.
“As chief lobbyist, French will be responsible for developing and implementing advocacy strategy for the world’s largest retail trade association,” the NRF said in a statement.
French previously worked at the International Franchise Association in a similar capacity.
“The retail industry needs a trade association with an advocacy footprint that matches its broad economic footprint,” said NRF president and CEO Matthew Shay. “David is one of the most experienced and influential lobbyists in Washington today. He has what it takes to lead our new government relations department and take our nationally recognized advocacy efforts to an entirely new level,” Shay said.
The NRF said it has launched a restructuring process “to support a higher level of engagement on legislative and policy issues.”
The NRF said it would be hiring of additional staff for its government relations team as well as creating a new communications and public affairs department to support its lobbying activity.
Crowley acquires freight forwarder in energy sector
Crowley Maritime Corporation announced it has acquired Jarvis International Freight, Inc., a Houston-based freight forwarding, export packing and logistics company primarily serving the energy, oilfield and mining industries. Jarvis was founded in 1984, and now becomes a wholly owned subsidiary of Crowley and will continue to operate from its existing headquarters, Crowley said in a statement.
Jarvis’ forwarding and logistics services include engineering, procurement, construction support, and project management. Crowley said ongoing projects expected to continue under the new parent company’s auspices include U.S. government export packing and freight forwarding of air and ocean shipments; drilling projects in Belize, Brazil and Madagascar; civil construction in Equatorial Guinea; and oilfield work in Algeria.
Jarvis' standard services include inland, air and sea freight, as well as import customs and documentation services.
Top five airfreight and logistics companies by sales per share
Below are the top five companies in the airfreight and logistics industry as ranked by sales per share.
Sales per share is a valuable metric in comparing relative value for companies in the same industry.
FedEx ranks first with sales per share of 118.5x; Park-Ohio Holdings (NASDAQ:PKOH) ranks second with sales per share of 69.3x; and CH Robinson Worldwide (NASDAQ:CHRW) ranks third with sales per share of 54.2x.
Atlas Air Worldwide Holdings (NASDAQ:AAWW) follows with sales per share of 51.5x and United Parcel Service (NYSE:UPS) rounds out the top five with sales per share of 48.7x.
SmarTrend currently has shares of CH Robinson Worldwide in an Uptrend and issued the Uptrend alert on July 14, 2010 at $58.66. The stock has risen 35.7% since the Uptrend alert was issued.
An international passenger train carrying 146 people toward Germany collided with a freight train in the eastern Netherlands on Tuesday. Police and local authorities said there were no injuries.
Babet Verstappen, a spokeswoman for Dutch rail network organization Prorail, said part of the passenger train derailed after the collision just after noon (1100 GMT) near the town of Zevenaar, 115 kilometers (70 miles) southeast of Amsterdam.
Police spokeswoman Andrea Jansen confirmed that the passenger train had partially derailed and said police had no reports of any injuries as a result of the crash.
German railway Deutsche Bahn said the train was traveling from Amsterdam to Frankfurt, and part of it was involved in a side-on collision with a freight train between Zevenaar and the German border town of Emmerich, the German news agency DAPD reported. Part of the train derailed but it didn't tip over.
The passenger train involved reaches speeds of up to 300 kilometers per hour (186 mph) in Germany, according to its website. It connects the Netherlands, Germany and Switzerland.
The cause of the collision was not immediately known.
The Port of Long Beach’s harbor commission voted this week to expand its Clean Truck program by penalizing smaller 'Class 7' trucks for "dray-offs" - the alleged practice of switching cargo from a "clean" to a "dirty" - within the Harbor District.
"Class 7" trucks are smaller and less powerful than "Class 8" trucks, which are typically used in the movement of shipping containers to and from ports, the port said in a press release.
Under the Clean Trucks program, Class 8 trucks are subject to strict emission standards and older models have been progressively banned from terminals since the program began in 2008. Class 7 trucks now will be added to the progressive ban starting July 1, 2011, the port said.
The program banned most Class 8 trucks that did not meet 2007 emission standards last year.
The port contends that since then, some trucking companies have begun using older Class 7 models to move lighter loads like empty containers. The port said up to 550 of the Class 7 trucks could be operating in the San Pedro Bay area, accounting for 2 to 3 percent of truck moves.
The Board also approved charging cargo owners a Clean Trucks fee if their containers are observed being switched from a clean truck to a banned truck within the Harbor District.
STB to hold railroad competition hearing in May
The U.S. agency that regulates railroads said Tuesday it will consider a major overhaul of rules to force freight-rail companies to compete more aggressively for farmers, coal producers and other shipping customers.
The Surface Transportation Board announced it would hold a hearing in May to study possible changes designed to spur competition, and it asked railroads to weigh in. The rules under consideration would be designed to make it easier for shippers to challenge rates and to gain access to competing railroads on segments currently served by a single rail company.
The agency said the initiative responds to the longtime concerns of shippers that railroads are raising rates and posting higher profits even though productivity hasn't increased at the same pace. The agency said it was sensitive to railroads' concerns that new rules could hurt the industry's financial health and reduce money used for track expansion and maintenance.
United Arab Emirates boasts the world's tallest building, a man-made island in the shape of a palm and is about to take its next ambitious step - linking cities by rail over the desert.
Already investing heavily in airlines and airports, as well as roads and public infrastructure, to attract and support growing commerce, the seven emirates are leaving nothing to chance as they bet on a freight and passenger network to help drive growth.
At stake for European and Chinese companies is a total $11 billion to be spent on the project, as UAE's Union Railway pushes to complete the rail system by 2017.
Even as the country struggles to regain its footing after the 2009 Dubai debt crisis and an exodus of investors, it is betting that there will be enough economic activity to justify the rail system. To that end, it is starting with freight and adding passenger services.
Dubai is still building out a metro network launched in 2009 linking the emirates malls and business areas, but passenger volume is still sparse, bringing into question whether a national railway system will work in a country dominated by cars fueled with cheap gas.
China, which sees the Gulf as a key strategic region, appears to be in a good position to win contracts.
The Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities, fell to its lowest in nearly two years on Wednesday as growing fleet supply and slow trade hit sentiment.
Brokers said flooding in Australia was disrupting shipping activity at a time when the dry bulk market was struggling with vessel deliveries ordered before economic turmoil in 2008.
The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertilizer, fell 1.82 percent, or 27 points, to 1,453 points and was at its lowest since Feb 4, 2009. It has fallen over 30 percent since first dropping on Dec. 7 last year.
Fresh flooding in Australia, the world's biggest coal exporter, as well as weather-related problems in Colombia, South Africa, Russia and Indonesia have hurt coal shipping.
Global shipbuilding orders may rise 4 percent this year to the highest since 2008 as economic recovery drives demand for consumer goods and fuel, according to estimates South Korea’s industrial ministry released today.
New vessel contracts will probably rise to 35 million compensated gross tons, led by orders for ships to carry containers and liquefied natural gas, South Korea’s Ministry of Knowledge Economy said. The tonnage total would be the most since 2008, when it was 47.1 million tons, according to Clarkson Plc., the world’s largest shipbroker.
Hyundai Heavy Industries Co. and Samsung Heavy Industries Co., the world’s two biggest yards, and their four largest rivals will probably win 33 percent more orders this year amid faster growth for the offshore project and container ship sectors they dominate, according to the ministry’s estimate.
Global trade may expand 7 percent this year, the International Monetary Fund has said.
Contracts for container ships may almost double to 6.7 million tons this year as global box shipping volume is expected to grow 10 percent, the ministry said. Demand for LNG vessels may climb 75 percent to 1.4 million tons, the ministry said.
Con-way cites rising health-care costs for Q4 revenue dip
Con-way Inc. said rising health-care costs will cut into fourth-quarter revenue at its freight division.
Con-way has struggled to meet its competitors' stronger-than-expected performance of late as the transport sector rebounds from last year's moribund levels. When the economic downturn slowed demand for freight transport, Con-Way slashed its prices, helping volume but hurting yield, a measure of pricing profitability.
The company said health-care costs were $11 million higher in the fourth quarter than the prior quarter, which Chief Executive Douglas Stotlar said outpaced the benefits gained from reduced operating costs and higher pricing.
U.S. forwarder applauds Canada’s corporate tax roll back
Purolator USA, a Jericho, New York-based freight forwarding and courier firm released a statement applauding the Canadian government’s roll back of its corporate-tax rate as of January 1 of this year, from 18 percent to 16.5 percent.
Purolator said it feels the tax cut is another step the Canadian government has taken that “could result in a spike in U.S. businesses seeking to expand north of the border.”
“Canadian consumers have demonstrated an affinity for U.S. goods, and thanks to the strong Canadian dollar, consumers have the buying power to purchase those goods,” said John Costanzo, president of Purolator USA
Canada’s new 16.5 percent tax rate represents a contrast to the 35 percent rate imposed by the U.S. government, the company said.
Victoria’s Secret, Juicy Couture, Gap, Banana Republic, Brooks Brothers and Bath & Body Works established operations in Canada in recent years.
Others, including Target and J.Crew have indicated plans to expand to Canada during 2011, according to Purolator.
Vancouver, B.C. coal terminal out of commission for two weeks
A major berth at Westshore Terminals, Canada's largest coal export facility, will be out of commission for at least two weeks after a gearbox that controls the boom movements on the shiploader at the terminal failed Wednesday.
The failure means Westshore will be unable to use Berth 1 to ship coal, but does not affect other aspects of the terminal operations at Roberts Bank.
The company says expects it will take two weeks to replace the damaged gearbox and complete the related repairs on the berth, which can handle vessels up to 260,000 deadweight tons.
This downtime will result in reduced coal handling capacity at Westshore during this period to throughput levels that can be handled through Berth 2. Westshore has advised its customers and will work with them to minimize disruptions to its customers’ shipments to the extent possible.
The problem coincided with an announcement by Port Metro Vancouver that B.C. is expected to post a 3.1 per cent GDP growth in 2011, mostly due to the "resurgence of the Asian economies."
Barge dumps acid and suspends shipping on the Rhine
Shipping on the Rhine was suspended on Thursday as authorities rushed to prevent an environmental disaster after a barge carrying 2,400 tonnes of sulphuric acid capsized.
The 360-foot tanker Waldhof, bound for the Belgium port of Antwerp, rolled over near the town of St. Goarshausen where the Rhine flows through a narrow gorge famed for the high slate Lorelei cliffs.
Concerned that the Waldhof's cargo of highly corrosive liquid might spill into the river authorities decided to close Europe's busiest waterway to traffic.
There's no doubt that U.S. businesses have been exporting, because sales by companies in the S&P 500 grew at about 13% according to Value Expectations, while S&P's Howard Silverblatt estimates that their operating earnings grew 47% -- far higher than America's 2.8% GDP growth rate.
And an analysis from ThomsonReuters suggests that S&P 500 companies getting more than half of their revenues from outside the U.S. grew significantly faster than U.S.-focused ones in 2010.
But the government can't run your business for you, so if you want to get in on that export action, what should you do?
To find out, [the author] interviewed executives at five global export leaders around the world -- companies that have achieved great success outside their home markets:
WATG, a Hawaii-based architectural services firm that gets 93% of its revenues outside the U.S.
GP Graders,, an Australian maker of agricultural equipment that gets 75% of its revenues outside Australia
Celeno,, an Israeli semiconductor maker that gets 80% of its revenues outside Israel
AHAVA,, an Israeli cosmetics company that gets 66% of its revenues outside Israel
BrewDog,, a Scotland-based beer maker that gets 70% of its revenues outside the U.K.
From those five, [the author] garnered 10 lessons that SMEs can use.
Howard Wolff, senior vice president of WATG, provides the first six quick pieces of advice for beginning exporters:
Offer Something Distinctive. Otherwise, you'll waste a lot of money and find yourself competing solely on the basis of price. That's a losing strategy, because in the global marketplace, there's no way a U.S. firm can win by trying to be the low-cost provider.
Focus Your Energy and Your Resources. No matter how big your company, you can't be everywhere. Do your homework, and invest strategically.
Develop Strong Relationships with Trusted Advisors. Follow existing clients into new geographic areas. Let them pave the way for you.
Get on Airplanes ... Often. You can't expect to develop relationships or build a business by making one trip to your new markets -- or even a handful. WATG has several people who spend 50% of their time away from home.
Build a Diverse Team. A multicultural, multilingual staff can help you enter new geographic territories while minimizing your risk.
Do Your Homework Before Deciding Whether to Open an Office. Once you decide you need to maintain a local presence in your new target market, look at all of the options for how best to achieve that. Successful models include moving someone with seniority to the area; moving a staffer with local knowledge; hiring someone locally to run your outpost; associating with an established firm there; or acquiring an established firm. Don't get locked into one model, either: WATG has employed of all five of these strategies in foreign markets.
Market by Turning Your Weakness Into a Competitive Advantage Most SMEs lack the capital or scale to conduct big advertising campaigns in export markets. But if the potential exporters use their small size to suggest a kind of David and Goliath battle between themselves and incumbents, they can achieve remarkable success at attracting customers without spending too much money.
BrewDog's first attempt at exporting -- to Sweden -- occurred because the company had so much trouble penetrating its local market in Scotland, which is dominated by the large brewers. Before approaching potential overseas partners, BrewDog identified the most influential beer writers in each market and sent them samples. "We got fantastic reviews and coverage," said CEO James Watt -- whose official title is "head of stuff." "When we went to the distributors, we said, 'We've done the marketing for you, all you've got to do is sell it."
Watt noted that a one-page magazine advertisement in the U.K. might reach a few potential customers for $7,871. BrewDog was able to reach 250,000 people around the world with a humorous YouTube-style video that it created for $2,361.
Tap Your Investors to Gain Export Market Access
Gilad Rozen, CEO of Celeno, wanted access to the Chinese market for Internet Protocol Television (IPTV) because it was big and growing fast. To do that, he needed an agent there who knew how the sales process worked there and had credibility.
Fortunately, Celeno had a Chinese investor, Victor Tsao, who provided valuable introductions in China and helped jump-start the company's China export strategy. Tsao gave Celeno instant credibility in China and helped identify the most relevant partners there. His help was essential in building Celeno's relationship with Chinese telecommunications firms.
Thanks to Celeno's ability to meet the stringent technical standards of the Chinese firms, it won a $50 million contract there. Rozen has great hopes for growth in China in the wake of a slackening of demand from U.S. and European markets, which accounted for 80% of Celeno's revenues in 2010. "China will become our largest market in 2011, accounting for 40% of our revenues. That compares with less than 10% [in 2010]," said Rozen.
Work With the Right Distributors
The key is finding a distributor that's well-connected in your export market, but not too big to care about your success. As Stewart Payne, CEO of GP Graders, told me: "Try to use agency relationships before any direct investments in markets are made, as it minimizes potential losses if the market doesn't work out the way you would like. There are no set up costs beyond training and marketing. Make sure you "own" the customer, not the agent, as the customer relationship should always continue where the agency relationship may not."
Keep Up With Change by Innovating Frugally
No industry is immune from change. The needs of customers evolve, new technologies emerge, and upstart competitors threaten the structure of markets. When an SME exports, its ability to gain market share depends on successful disruption of its new market. But even after an SME establishes a foothold, it musts keep innovating to make further progress.
The Israeli firm AHAVA got its start making cosmetics from Dead Sea mud. That gave it a distinctive product (remember that first lesson), but in the intensely competitive cosmetics industry, innovation is essential. So AHAVA needed to try out new ideas, and it needed a way to experiment frugally.
As CEO Yacov Ellis explained, AHAVA tests out its new product ideas in Israel. It is a small market, but if an idea works there, the company is confident that it will sell overseas, and it doesn't, the cost of the failure will be relatively modest. The general lesson is that it makes sense to test ideas on your home turf before exporting them.
And there you have it: Five global export leaders, 10 key lessons. If America's small and midsize businesses apply them successfully, the administration's export goals may just be within our reach.
Maersk chief: Growth to continue despite “colossal volatility”
Increasing population and incomes in developing countries and a tendency for world trade to expand faster than GDP point to long-term growth in the transport business, the head of Danish shipping and oil group A.P. Moller-Maersk said.
"In our world, there is no doubt that we stand before a period of long-term growth," Maersk group Chief Executive Nils Smedegaard Andersen told a gathering of financial analysts on Wednesday evening.
Maersk Line is the world's biggest container shipping company and is sometimes seen as a barometer of global trade.
"Traditionally, we have seen container transport grow 2-3.5 times faster than development in global GDP," Andersen said.
Prospects for population growth in developing countries whose people are becoming wealthier and want to consume things like people in Europe and North America will create plenty of work for a group like Maersk even though there will be bumps in the road, Andersen said.
"We should get used to a world where there will be colossal volatility both in the short and long run, with dramatic upturns and downturns," he said at the annual New Year's dinner of the Danish Society of Financial Analysts.
"But long-term growth -- that we think is entirely given," Andersen said.
U.S. trade deficit narrowed in November except with China
The U.S. trade deficit narrowed slightly in November as exports grew faster than imports, although the balance with China—a hot-button political issue—worsened.
America's trade gap declined 0.3% to $38.3 billion, compared with October, the Commerce Department said Thursday, fueled in part by increases in U.S. sales of planes and food overseas.
The narrower deficit is likely to prompt economists, who have already become more upbeat about U.S. growth, to again boost estimates for the fourth quarter. A narrowing deficit means the U.S. is producing more, both to fill export orders as well as meet domestic demand.
U.S. exports to China hit an all-time high of $9.5 billion in November, an increase of 1.9% from the month before. But the growth in exports doesn't begin to match U.S. imports from China, which rose 0.9% to $35.12 billion. This pushed the overall U.S. deficit with China up 0.5% to $25.63 billion.
U.S. exports and imports both gained modestly in November, with exports increasing 0.8% to $159.6 billion. Imports rose 0.6% to $198 billion in the same time frame.
Russia’s Far Eastern Shipping Company (FESCO) Transportation Group announced the
reorganization of its container business.
The company said in a statement it has formed
a single logistics integrator, naming it FESCO Integrated Transport LLC, which will oversee containerized services for maritime, rail and road transportation as well as integrated logistics services, intermodal shipping and services of refrigerated cargoes.
Sergei Kostyan was appointed as a member of the board, vice president and CEO of FIT LLC, and will manage FESCO's container business, the company said.
FIT's former CEO, Sergei Grigorenko, was appointed chief operating officer of FIT, effective January 18, 2011. As of January 11, 2011, Dmitri Kurdakov was appointed managing director of FLV LLC and
director of FIT's Vladivostok branch. Mr. Kurdakov also is acting CEO of Transfes Vladivostok.
Pirates kidnap Danish crew; leave vessel
The crew of a Danish weapons ship have been kidnapped by pirates in the Gulf of Aden off Oman, but in an unusual departure from normal practice, the vessel was not seized, a report said Thursday.
Sources told the TradeWinds shipping publication that the 2,000-tonne ship, The Leopard, was carrying "sensitive" cargo, believed to include weapons.
Vessels operated by the Leopard's Danish operator, Shipcraft, routinely carried nuclear items, although none were believed to have been on board this vessel, it said.
The six crew -- two Danes including the captain, and four Filipinos -- had been taken to a seized Taiwanese fishing vessel being operated as a mothership, the report added.
The ship had meanwhile been located and searched by the Turkish navy and no trace of any pirates or pirate skiffs had been found.