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Summary for January 16 - January 20, 2012:
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Monday, January 16, 2012

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Don Schneider of Schneider National dies

Donald (Don) J. Schneider, chairman emeritus and former president and CEO of Schneider National, Inc., died Jan. 13, 2012 at 76 after a prolonged battle with Alzheimer's disease. Under Don Schneider's leadership, Schneider International, located in Green Bay, Wisconsin, became one of the largest truckload carriers in the U.S.

"The transportation and logistics industry has lost one of its most passionate and influential voices," said Governor Bill Graves, president and CEO of the American Trucking Associations. "Don Schneider was a visionary, bringing business acumen and technology to blaze a trail and set the standard in the modern day development of our industry."

Schneider began working for his father's trucking company in high school as a mechanic's helper and a truck driver to fund his college education in the 1950s. He graduated from St. Norbert's College with a degree in business and married his wife, Patricia O'Brien, in 1957. After a 13-month stint in the military in Korea, he studied for his master's degree at the Wharton School of Business. In 1961 he joined his father's trucking company as a manager. In 1976, Don officially became president of the then $82 million company. His father Al passed away in March of 1983.

Schneider led the organization for more than 25 years, and was responsible for creating thousands of jobs. The company grew during some of the industry's greatest challenges, including deregulation of the early 1980s. Schneider brought business acumen, strong customer service and a commitment to technological innovation to Schneider National, which was the first in the industry to adopt satellite-based communications and positioning in its trucks.

Schneider was also a pioneer in providing intermodal and logistics services. In 1993 Schneider founded Schneider Logistics, now a leading solutions provider, as a wholly owned subsidiary of Schneider National. He formed Schneider Communications, a regional telecommunications company, in 1982.

Schneider retired from day-to-day operations in 2002, selecting then chief operating officer Chris Lofgren to succeed him as president and CEO. Don continued on as chairman of the board until 2007.

Schneider is survived by his wife of 53 years, Pat, five children, 13 grandchildren, two great-grandchildren and 18,222 members of Schneider National worldwide.

POLB sees slight container traffic decrease in 2011

The Port of Long Beach, the second busiest seaport in the U.S., saw a 3.2 percent decrease in business in 2011. Port officials say the decline is because of weak economic recovery in the nation and that it was operating six cargo terminals last year instead of its usual seven.

In 2011, POLB handled 6.1 million containers. Imports were down 3.3 percent year on year, and exports decreased by 3.6 percent. The number of empty containers handled by the port decreased 2.7 % compared to 2010.

California United Terminals left Long Beach for POLA in late 2010. At that time, California United constituted about 10 percent of POLB's business.

- Los Angeles Times

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New $250M container port in Mexico

Philippine-based port operator International Container Terminal Services Inc (ICTSI) said Monday it has begun construction on a $250 million container port at the Port of Manzanillo on Mexico's Pacific coast.

ICTSI, which won a bid in 2009 to develop a second terminal at Manzanillo, said that Specialised Container Terminal 2 would be completed within two years. The first phase in the three-phase development plan deals with the construction of two berth positions with a total capacity of 450,000 twenty-foot equivalent units.

- Reuters

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PSA International container volume rose 5.6 percent

Singapore-based port operator PSA International said the number of containers handled in its ports rose 5.6 percent in 2011, according to a statement issued by the company on Thursday.

PSA handled 57.09 million 20-foot equivalent units in 2011. Volume in Singapore rose 6.1 percent to 29.37 million units.

- Bloomberg

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Hope for survivors fade in Italian cruise ship disaster

Rescuers resumed the search Monday of the 114,500-ton cruise ship Costa Concordia, which was holed by a rock and lodged off the island of Giglio after rolling to its side late on Friday. They are seeking up to 16 missing individuals out of the 4,200 passengers and crew that were aboard the enormous, multi-storied liner. Six bodies have been found so far. More than 60 people were hurt.

A firefighter spokesman said all the above water areas have been searched, which conveyed small hope that more survivors would be found.

The vessel's captain, Francesco Schettino, was arrested on Saturday, accused of manslaughter and abandoning ship before everyone was evacuated.

The disaster happened just as passengers were sitting down to dinner on Friday night, resulting in panic and thousands trying to get on lifeboats and some leaping into the frigid ocean.


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Tuesday, January 17, 2012

Top Story

China's exporters face space challenges ahead of Lunar New Year

Container-shipping capacity cuts in the Asia-Europe and trans-Pacific trades could reportedly create difficulties for China's exporters ahead of that country's impending Lunar Year holiday.

"Shippers and receivers would be wise to factor in an additional seven days to the average transit time between Asia and Europe," said Jacques Chan, general manager, Hong Kong and South China for freight forwarder BDP International, in an interview with the South China Morning Post.

Cargo owners have reportedly been paying shipping lines a premium as a guarantee on the timing of shipments before China's major annual holiday that, in effect, shuts many of its factories down for a two-week period beginning January 23.

"The cargo can sit in a container yard for a week before reloading onto another vessel destined to Europe. Shippers are paying premiums to protect cargo space that they have already reserved. We are talking about [an extra] $200-300 per container in most cases," Chan said in the Post story.

The U.S. Federal Maritime Commission is reportedly monitoring trans-Pacific shipments in the event of potential disproportionate delays and rate increases in the wake of large-scale service consolidation that amounts to a space reduction of 15 percent in that trade lane, according to statistics culled by the Post.

The spot rate for Hong Kong-Los Angeles container-shipping services is $1,832 per-FEU, the Post reported.

For the full South China Morning Post story:

Schneider National extends contract with CSX amid tightening truckload capacity

Schneider National, Inc announced it has signed a new, multiyear agreement with CSX Transportation as the U.S. -based trucking and logistics provider said it projects its intermodal freight volumes to increase in 2012.

"The expansion of our relationship with CSX will create a strong foundation for Schneider Intermodal's continued growth and our customer's success," said Bill Matheson, president of intermodal services for Schneider National in a statement.

Matheson said truckload capacity is getting tighter and that shippers will need to find "creative new solutions to move freight."

Schneider National said CSX, which became its primary Eastern rail provider in 2008, has offered "truck-like" service to customers, and also cited the rail carrier's capital investments, including into the Northwest Ohio intermodal terminal.

"The current economic conditions and business environment tell us there will be more interest than ever in finding cost-effective, reliable modes for moving freight," said Bill Clement, vice president-Intermodal of CSX Transportation.

According to Matheson, the Eastern U.S. and Midwest will experience the brunt of the tight driver market in 2012.

"Eastern intermodal service will provide significant relief to shippers who convert truckload freight, and Schneider will be significantly adding additional containers, tractors and drivers to its fleet to prepare for the increased demand," he said.

Craig appointed new CMO for BNSF Logistics

Jim Craig is the new chief marketing officer for BNSF Logistics, the third party logistics arm of the second largest U.S. Class One railroad.

Prior to joining BNSF Logistics, Craig served 19 years at Yusen Logistics (formerly NYK Logistics) where his last post was as senior vice president of corporate sales and marketing. Prior to Yusen, Craig was the director of sales for Con-Way Truckload Service.

Craig's responsibilities at BNSF Logistics are to include new business development, sales and marketing, the company said.

Craig replaces Frank Armstrong, vice president, business development, who is retiring after four years with the company and more than 35 years in the industry.

Video link: South Korean tanker breaks in half

Link to video footage of a 4,191-ton tanker that exploded on Sunday morning in the Yellow Sea off South Korea's Port of Inchon, killing five crewmembers, and leaving six missing:

Video link: South Korean tanker breaks in half

Link to video footage of a 4,191-ton tanker that exploded on Sunday morning in the Yellow Sea off South Korea's Port of Inchon, killing five crewmembers, and leaving six missing:


Thursday, January 19, 2012

Top Story

OOCL signs $4.6 bil lease with Port of Long Beach

The 12th largest ocean carrier in the world, Hong Kong-based Orient Overseas Container Line, has reportedly signed a 40-year, $4.6 billion lease with the Port of Long Beach to operate a cargo-handling operation that will inhabit the Southern California port authority's large-scale Middle Harbor project.

"This agreement represents a major endorsement of our vision for the port by one of the leading maritime companies in the world," said Christopher Lytle, new executive director of the Port of Long Beach, who succeeded the longtime port chief who retired, Richard Steinke.

Lytle will reportedly make the formal announcement of the OOCL deal today in his first state-of-the-port address.

The OOCL news comes on the heels of a flat year of container-handling for the second busiest U.S. port complex and the loss of tenant Hyundai Merchant Marine, which bolted next door to the Port of Los Angeles after reportedly not wanting to wait for the Middle Harbor project to come to fruition.

When developed to its final phase, the over 300-acre site will have capacity to handle 3 million TEUs.

"We look forward to seeing the positive impact that this commitment will have for years to come," said Philip Chow, chief executive for OOCL as reported in the Los Angeles Times.

For the full L.A. Times story:

Shipping operators face $100 bil in ballast water retrofit costs

The International Maritime Organization is expected to ratify a binding ruling at its convention this year that would end up requiring shipping line operators to retrofit 60,000 vessels with technologies to battle diseases and invasive species in ballast water at a total reported cost of $100 billion.

The ballast water treatment upgrade regulation comes at a time when shipping lines, especially container carriers, are facing financial challenges amid a freight rate slump.

"It's right that we shouldn't move dangerous species around the world," said Jan Fritz Hansen, executive vice president of the Copenhagen-based Danish Shipowners' Association. "But the limits being set look very costly and will require substantial investment at a time when international shipping and trade is in the red," he told Bloomberg News.

Denmark's Maersk, the leading container-shipping group in the world, reportedly estimates its ballast water treatment retrofit costs to be approximately $500 million.

Ballast water was blamed for a cholera outbreak that killed 10,000 people in the 1990s.

For the full Bloomberg report:

Port of Seattle records third-biggest box-handling year

The Port of Seattle announced it posted the third-busiest-ever year ever in its history in 2011, handling 2.03 million TEUs, down slightly from 2010's record-breaking year of 2.1 million TEUs.

The port attributed growth in exports and its cargo-handling infrastructure for its success last year.

"We have the capacity and the facilities to handle 10,000 or more TEU container ships, we have excellent intermodal infrastructure and regional distribution facilities, and we continue to work with our customers collaboratively to keep the business here," said Linda Styrk, Seattle's managing director of the seaport.

UPS, Fedex trial date looms in 2013 over antitrust claims

A complaint to the U.S. Department of Justice filed by a Portland, Ore-based third-party consulting firm in 2010 against parcel carrier giants United Parcel Service and Federal Express alleging antitrust violations is reportedly moving towards an actual trial date in 2013.

AFMS LLC, a firm that negotiates small package rates with carriers like UPS and Fedex on behalf of shippers, originally filed the complaint on June 10, 2010.

The complaint claimed that executives from UPS and FedEx announced at an industry event in October 2009 that they would no longer deal with third-party consultants.

The AFMS complaint alleges that subsequent, internal memos from UPS and FedEx were circulated on April 23, 2010 that laid out anti-third-party policies.

The complaint to the DOJ contends that UPS and FedEx colluded to exclude third-party shipping consultants from business dealings.

In statement released today by AMFS, the consulting firm said it had "a history of engaging in amicable and mutually profitable negotiations [with UPS and Fedex] for nearly 20 years for companies like Sony, GE, Quiksilver, Domino's Pizza, Johnson & Johnson, Toyota, St. John Knits, Precision Castparts, REI, Blue Cross Blue Shield, Fred Hutchinson Cancer Research Center, Reader's Digest, Hunter Douglas, Mentor Graphics, Fred Meyer and many more."

The parties in the claim have now reportedly agreed to a trial date, pending court approval, of June 18, 2013.

"We are obviously pleased that our case will be proceeding forward," said Mike Erickson, founder and president of AFMS.

"By severely restricting dealings with third-party consultants, UPS and FedEx are unfairly preventing shippers from accessing valuable knowledge and information that can make a significant impact on their contract negotiations and, ultimately, on their bottom lines. We strongly believe in the claims made in our complaint and are encouraged by the defendants' decision not to challenge our pleadings," Erickson said.

Photo of mystery woman emerges who allegedly dined with captain of doomed cruiseship before disaster

A photo was released by Italian media outlet Il Secolo that reportedly shows the captain of the doomed cruiseship Costa Concordia dining with a mystery woman less than an hour before the vessel struck a reef off Italy's Giglio Island, killing at least 11 people to date.

According to news reports, the 25-year-old Moldovan woman might have been on board illegally and may have been a guest of the skipper of the Costa Concordia, Francesco Schettino, who is now under house arrest.

The woman could reportedly emerge as a key witness in the Italian prosecution's case.

For the full Fox News report:


Friday, January 20, 2012

Top Story

POLA sets new record for container exports

The Port of Los Angeles is the first U.S. port in history to export over 2 million TEUs of American goods overseas. The country’s busiest port processed 2.11 million outgoing cargo shipments in 2011, according to POLA yearend statistics, which bested the port's former record of 1.84 million export TEUs set in 2010.

In terms of U.S. 2011 exports, the POLB came in second at 1.69 million TEUs, and New York-New Jersey is third at 1.62 million.

Last year, POLA handled 7.94 million TEUs, compared to 2010’s 7.83 million. POLA and the Port of Long Beach combined moved around 14 million in 2011, a modest decrease from the 14.1 million TEUs reported in 2010.

The cargo figures were helped by POLA’s Trade Connect program, which sets up U.S. exporters with potential overseas customers, and the move of California United Terminals from POLB to the Los Angeles port.

- Los Angeles Times

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Union Pacific freight revenue up 24 percent

In the fourth quarter of 2011, freight revenue rose 24 percent for Union Pacific Corp, exceeding Wall Street expectations, mainly due to a jump in prices and from transporting materials to and from shale oil drilling sites.

Volume increased 3 percent, year on year. Shale oil sector shipments accounted for up to half of the gain. UP carries steel, sand and pipe to sites that extract oil and gas from shale rock, then hauls out the crude oil. Volume in the sector doubled to 200,000 carloads in 2011.

UP’s chemical sector volumes rose 10 percent, and the industrial sector increased by 7 percent. Coal shipments rose 8 percent, driven by the nation’s demand for energy. Auto shipments rose 10 percent, reflecting increasing sales and production.

- Wall Street Journal

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Two more years of container overcapacity, says Platou

RS Platou, Norway’s largest shipbroker, projects another two years of struggle in the container and tanker shipping markets due to overcapacity and slow economic growth.

A company official said it will be 2013 before the industry works through global oversupply issues, which has reduced demand, increased cancellations and spurred delays in new ship construction.

New ship orders will fall 10 percent this year due to limited bank financing, according to Deutsche Bank AG, which projected a drop 44 percent drop in orders for container ships and an 11 percent drop for tankers.

Platou expects to see consolidation and restructuring in the shipping industry this year, particularly in the tanker market.

- Bloomberg

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U.S. cargo theft up 8.3 percent

According to Freight Watch International, cargo thefts in the U.S. increased by 8.3 percent in 2011 to a total of 974.

The logistics security agency reported 853 of the 2011 thefts involved a complete container or truckload. Food and beverages were the most sought after goods, accounting for 23 percent, followed by electronics, which accounted for 17 percent of the stolen property. The average value per occurrence was approximately $319,000.

The top states for 2011 cargo thievery were California with 254 incidents; Florida, 135; New Jersey, 124; Texas, 104; Georgia, 69; and Illinois, 53.

- Business Insurance

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Drug gang abandons $150M in drugs in containers

A drug syndicate imported $150 million in heroin, ice and pseudoephedrine in metal tea canisters concealed in the frames of 54 containers shipped from China to Sydney, Australia. The drugs were never retrieved, and the containers were subsequently emptied, sold to unwitting owners, and scattered throughout the state.

Sydney police have tracked down 53 of the containers at 23 different locations. Each container carried 15 kilograms of heroin or pseudoephedrine, valued at up to $3 million.

One container remains missing.

-Sydney Morning Herald

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