Today's Cargo News Archives
Summary for January 26 - January 30, 2009:
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Monday, January 26, 2009

Top Story

Shipper News: Two U.S. manufacturers
announce business cuts

Two U.S.-based manufacturers announced business cuts today in the wake of global economic conditions.

Peoria-Illinois-based Caterpillar Inc, said Monday it is going to cut 20,000 jobs due to the economic downturn. The machinery company operates 135 manufacturing facilities in the U.S.

“These actions support lowering our production costs in line with a 25 percent decline in sales volume and reducing selling, general and administrative and research and development costs supporting our machinery and engines business by about 15 percent,” the company said in a statement.

Meanwhile, Barnes Group, Inc., the Bristol, Connecticut-based aerospace and industrial component maker announced today it has sold what it terms its “North American Integrated Logistics activity” for an undisclosed amount and to an as yet unidentified buyer. Barnes said it will vacate its Central Lake, Mich. Facility, idle its Monterrey, Mexico operation, and close its Atlanta distribution center by March. The company also announced plans to cut staff and freeze pay for salaried employees in order to achieve annual savings of approximately $40 million.



US Industrial REIT II acquires Chicago-area
distribution center

The 595,0000-square-foot Cinram Distribution Center was added to the portfolio of US Industrial REIT II. The purchase price was not disclosed.

Canadian-based Cinram manufactures and distributes DVDs, CDs and computer software for customers that include Warner Home Video, Warner Music Group and Twentieth Century Fox Home Entertainment. Cinram Distribution executed a long-term lease at the property.

"We are very pleased to be adding this quality asset to the US Industrial REIT II portfolio," said Pat Duncan, chairman and CEO of USAA Real Estate Company. "This acquisition marks the REIT's entry into the Chicago marketplace which is considered the industrial capital of the Midwest."

In addition to the property, the REIT also purchased an additional 11.7 acres of adjacent land. The property is located within the 660-acre multi-use Meridian Business Campus in Aurora, Illinois. USAA Real Estate said the midwestern hub sits at the juncture of several major highways and is adjacent to the Burlington Northern Railroad.

US Industrial REIT II invests in what it terms “high quality bulk distribution properties located in major markets throughout the United States. The REIT continues to actively pursue acquisitions as it continues to invest primarily in single and multi-tenant industrial distribution buildings of 250,000 square feet and larger in high growth target markets.”



Stocks fall in Japan but not for its top shipping lines

The Nikkei 225 Stock Average dropped 0.8 percent to close at 7,682.14 today, the lowest level in three months, but two of Japan’s top shipping companies - Mitsui O.S.K. Lines Ltd. and Nippon Yusen KK  – posted gains in their respective stocks.

Japan’s No. 2 bulk shipping line, Mitsui O.S.K, climbed 3.8 percent after freight rates for commodities rose, according to a Bloomberg Japan report. Rival NYK rose 1.3 percent. The Baltic Dry Index, which measures shipping costs for commodities, showed a 3.7 percent gain, with rising global demand for iron ore.



DHL launches road freight service between Europe and Middle East

DHL Freight announced the launch of an overland transport business between Europe and the Middle East. The company said it can now offer door-to-door shipments for it customers involved in pharmaceutical, electrical, engineering, consumer, construction, automotive and oil and gas, from 38 European countries to a number of distribution centers and local terminals in the Middle East.

“With this new option, it is really worthwhile for our customers with clients in Europe and/or the Middle East region to take another look at their shipment structure,” said Thomas George, CEO, DHL Freight. “Using DHL’s Road Freight Service between Europe and Middle East can lead to remarkable cost savings, shortened delivery times and an optimized supply chain.”

The company said that in order to guarantee short transit times, all European shipments are consolidated in 13 major gateways and forwarded to a transit center in Istanbul. From there, the cargo is fed into DHL’s Middle East network. Each shipment is assigned a unique code and can be tracked online, the company said. In addition to customs clearance, DHL said it takes care of all administrative work, such as letters of credit and all risk-insurance services. With access to the larger DHL network, DHL Freight said its customers could benefit from further synergies when it comes to courier services, warehousing solutions as well as air and ocean freight.



DP World to cut costs

DP World, the Dubai-based, global terminal operator, announced today that due to the slowdown in trade, especially at its Asian and select European port operations, it would review all of its expansion projects, cut costs, and freeze recruiting.

DP World operates 48 marine terminals along with 13 new terminals under development, in 31 countries globally. The company, which is 80-percent owned by the Dubai government, had posted a 122 percent increase in first-half 2008 profit.

The shipping trade has changed dramatically since that time. "We expect the challenging macroeconomic environment to continue for the foreseeable future," said Yuvraj Narayan, chief financial officer for DP World at a media briefing.

"Opportunities come to us all the time, but we are in no hurry to progress until there is a degree of stability," Narajan added.



Obama bailout plan includes increased security, trade at U.S. ports

The large-scale spending bill proposed by President Barack Obama over the weekend includes increased security and trade at U.S. ports. In the almost trillion-dollar bailout plan, the President generally outlined some of the components that would be addressed, without offering explicit details as yet. Some of the areas addressed include healthcare for 8.5 million people, 3,000 miles of electrical lines, doubling renewal energy capacity in three years, and port security and trade improvements.


Tuesday, January 27, 2009

Top Story

Trucking dropped 11.1 percent in December

The American Trucking Associations (ATA) reported for-hire truck tonnage plummeted 11.1 percent in December, the largest month-to-month drop since April 1994, and the third-largest decline since the ATA began collecting this data in 1973.

Compared with December 2007, the index declined 14.1 percent, the biggest year-over-year decrease since February 1996. During the fourth quarter, tonnage was down 6 percent from the same quarter in 2007, the ATA reported.

"Motor carrier freight is a reflection of the tangible-goods economy, and December's numbers leave no doubt that the United States is in the worst recession in decades," said ATA Chief Economist Bob Costello.

"It is likely truck tonnage will not improve much before the third quarter of this year. The economy is expected to contract through the first half of 2009 and then only grow slightly through the end of the year," he said.

The ATA said trucking serves as a barometer for the U.S. economy, representing nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.7 billion tons of freight in 2006. Motor carriers collected $645.6 billion, or 83.8 percent of total revenue earned by all transport modes, the ATA reported.

The ATA is a federation of other trucking groups, industry-related conferences, and its 50 affiliated state trucking associations and it says it represents more than 37,000 members covering every type of motor carrier in the U.S.

Con-way posts fourth-quarter loss

In related news, trucking operator Con-way Inc. reported a fourth-quarter loss of $43 million compared to a $34 million margin of profit for the same period a year earlier. Revenue fell 6.2 percent to $1.13 billion, which fell short of the company’s projection of $1.17 billion.

Con-way said its less-than-truckload freight business, full-truckload business and logistics unit all lost money in the fourth quarter, and the company has cut jobs, frozen management salaries for 2009, and reduced capital spending.



U.S. forest products stock index declines 41 percent

The U.S. forest products stock index of the 27 largest forest company stocks fell over 41 percent to 50.59 from the same period a year ago, as reported Monday at market’s closing by Forestweb, a forest products industry analysis and reporting bureau.

Among the most active stocks in the Forestweb iiStock Index is Smurfit-Stone Container Corp. (SSCC) at $.04, nearly a 100 percent drop from a year ago. Temple- Inland (TIN) fell 74 percent from a year ago to $4.46, and International Paper (IP) saw its stock price fall to $10.73, or a 66 percent year-over-year change.

The Forestweb report pointed to 2009 being an especially challenging year for the forest products sector, including: a severe cyclical downturn marked by sharp volume declines; an acceleration of negative secular trends in some niches; and tight credit conditions.

The forest products industry was cautiously optimistic about its future as of early September of last year, the report said, but the subsequent financial crisis, punctuated by the Chapter 11 bankruptcy filing of Smurfit-Stone, the second largest containerboard and corrugated producer, has rocked the industry.

According to the Fibre Box Association, box shipments fell 14.4 percent in November from a year earlier, while containerboard consumption was down 15.3 percent. For 2009, U.S. box shipments are estimated to drop by more than 3.5 percent, the report said.



Houston port chief retiring

Tom Kornegay, the executive director at the Port of Houston Authority for the past 17 years, is retiring as of Sunday, according to a report in the Houston Chronicle.

Kornegay reportedly cited family reasons related to the recent death of his mother.

Kornegay started with the Port of Houston in 1972 in its engineering department. He went to oversee the expansive Bayport terminal complex development in recent years.



Hellman Worldwide Logistics selects
GT Nexus platform

GT Nexus announced it is has been selected to provide a global sea freight contract management system for Hellmann Worldwide Logistics. Hellmann will consolidate contracts and rates for all of the company's containerized shipments into a single, standardized repository, according to GT Nexus.

"With our continual growth in our freight volumes, combined with the abolition of the conference line system, we need to deploy a central, global platform to manage our transportation rates," said Marcus Leaver, global seafreight director for Hellmann.

GT Nexus said its platform will support both full container load shipments (FCL) and less than full container loads (LCL) being moved across multiple trade lanes, across all carriers. Hellmann employees will use standard web browsers to instantly access updated, fully calculated rates and routings, including the inland legs of shipments.

Once the sea freight contract information platform is in place, Hellmann has the option to expand it to support other key business processes, GT Nexus said. Quotation, global shipment visibility, allocation tracking, and data feeds into other internal systems are among the areas being considered for phase two.

Hellmann consists of 16,500 employees in 443 offices located in 157 countries, and moved over 250,000 TEUs in 2007, according to company statistics.



IBM and eFuture to provide SaaS retail distribution solution in China

GT Nexus announced it is has been selected to provide a global sea freight contract management system for Hellmann Worldwide Logistics. Hellmann will consolidate contracts and rates for all of the company's containerized shipments into a single, standardized repository, according to GT Nexus.

"With our continual growth in our freight volumes, combined with the abolition of the conference line system, we need to deploy a central, global platform to manage our transportation rates," said Marcus Leaver, global seafreight director for Hellmann.

GT Nexus said its platform will support both full container load shipments (FCL) and less than full container loads (LCL) being moved across multiple trade lanes, across all carriers. Hellmann employees will use standard web browsers to instantly access updated, fully calculated rates and routings, including the inland legs of shipments.

Once the sea freight contract information platform is in place, Hellmann has the option to expand it to support other key business processes, GT Nexus said. Quotation, global shipment visibility, allocation tracking, and data feeds into other internal systems are among the areas being considered for phase two.

Hellmann consists of 16,500 employees in 443 offices located in 157 countries, and moved over 250,000 TEUs in 2007, according to company statistics.



Liebherr announces record year in 2008         

Liebherr anounced it delivered 102 mobile harbor cranes in 2008, a 16 percent increase over 2007. Liebherr said it broke the 100-machine mark last year, and that it was the third year in a row that the company has reported double-digit growth in the mobile harbor crane segment.

Europe was Liebherr’s largest market with 50 percent market share, with mobile harbor cranes working in a total of 83 countries, the company said. The top selling models in 2008 were the LHM 500 at 40 units sold, and the LHM 400, with 32 sold.



Two container cranes on their way to
Tacoma terminal

Two container cranes are reportedly on their way to the Washington United Terminal at the Port of Tacoma. The cranes were manufactured by Shanghai-based Shanghai Zhenhua Port Machinery Co., and are 273-feet high with a 24-container reach. Washington United will have six cranes with the current additions, and is scheduled to have a seventh unit delivered next year.


Wednesday, January 28, 2009

Top Story

Latest Q4 earnings reports: A mixed bag

The latest round of fourth-quarter earnings revealed a mixed bag of reports out of the manufacturing and transportation sectors.

The fourth-quarter news for Chicago-based Boeing, the world’s second-largest airplane manufacturer, was not rosy, as it reported a loss of $56 million, compared with profit of $1.03 billion for a the same time frame a year earlier, and a 27-percent fall in revenue to $12.68 billion.  Boeing delivered 50 planes in the last quarter compared to 112 for the fourth quarter of 2007.

Boeing delayed the first test flight and delivery of its highly touted new 787 jetliner, blaming, in part, the 58-day strike at its Seattle operations during the fourth quarter. 

The company has announced plans to cut about 4,500 positions, or about 3 percent of its work force, as a result of declining commercial aircraft orders.

Containers dropped for APL

Likewise, Singapore's Neptune Orient Lines (NOL), owners of the world's seventh-largest shipping line, reported today a 24 percent drop in its container business for the six weeks leading up to December 26, compared to a year ago as global demand slumped.

NOL said in a statement its shipping arm APL carried 218,100 FEUs in the six-week period, and the average revenue per-FEU rose 3 percent to $2,921 from $2,834.

Profits up for Norfolk Southern and C.H Robinson

The fourth quarter was rosier for two U.S.-based transportation providers.

Norfolk, Virginia-based Norfolk Southern Corp., the fourth-largest U.S. railroad reported what it termed a better-than-expected quarterly net profit of $452 million, up from $399 million from a year earlier.
"While it is unclear how long the downturn will last, long-term trends point to freight railroads as the preferred way to move goods and relieve highway congestion," said Wick Moorman, CEO of Norfolk Southern.

Meanwhile, transporation services provider C.H. Robinson Worldwide, reported a 4.3 percent rise in its fourth-quarter profit with $88.9 million compared to $85.3 million a year ago. The company posted revenues of $1.955 billion compared to $1.952 billion for the same period in 2007.

Despite the profitable quarter, Chairman and CEO John Wiehoff was cautious about 2009.

"The environment remains unpredictable, and we do not know whether our experience so far in January is a good indication of what the full first quarter or the year will bring. A sustained, slow freight environment is the most challenging for growth," he said.



Puget Sound ports pledge more funds
for clean air initiative

The Ports of Seattle and Tacoma, and the Puget Sound Clean Air Agency, announced yesterday they would match $318,000 in additional funding for the Clean Air Agency's Puget Sound Ports Cargo-Handling Equipment Replacement and Retrofit Program. 

This funding is on top of $850,000 from the U.S. Environmental Protection Agency (EPA and supports the retrofit or replacement of 38 off-highway trucks, cranes and forklifts at the Port of Seattle, which is approximately 10 percent of its fleet.  At the Port of Tacoma, 50 to 60 terminal tractors, cranes, off-highway trucks and general industrial equipment will be retrofitted, constituting 14 percent of its fleet. All the replaced and retrofitted equipment will use ultra-low sulfur diesel, the ports announced.

"We look forward to implementing this and more diesel emission reduction
projects with partners in the Northwest Ports Clean Air Strategy. Through our Diesel Solutions program we have now cleaned up over 5,000 diesel engines in the region. Partnerships with the Ports of Seattle and Tacoma, U.S. EPA and the Washington Department of Ecology have been key to that success," said Dennis McLerran, executive director of the Puget Sound Clean Air Agency.

The clean-air initiatives have been part of collaborative efforts between the ports of Seattle, Tacoma and Port Metro Vancouver, B.C. to reduce seaport-related air emissions in the region. The clean air alliance members have said they are trying to establish short- and long-term performance measures to reduce emissions from cargo-handling equipment, rail, ocean-going vessels and trucks.



Advanced H2O signs 15-year lease at Dallas Logistics Hub

The Allen Group, developer of the Dallas Logistics Hub (DLH), a 6,000-acre multi-modal logistics park in southern Dallas County, announced today that Advanced H2O LLC, a producer of private label bottled water and water-based beverages, has signed a 15-year lease to occupy approximately one-half of a 635,040 square-foot cross-dock facility within the Dallas Logistics Hub.

“We will have another 322,000 square-feet remaining to lease in the first building, as well as Building 2, which offers a full 192,000 square-feet of warehouse space,” said Daniel McAulliffe, president of The Allen Group’s Texas division. Both construction projects were completed in the fall of 2008 and will soon become North Texas’ first two LEEDTM Certified industrial buildings, McAuliffe said.
“I am excited to welcome the Advanced H20 Company to the City of Dallas, as this will present a prosperous opportunity for job growth and an economic stimulus to the Southern Sector,” stated Dallas Council-member Tennell Atkins in a recent interview.

Advanced H20 produces private-label bottled water and water-based beverages and has facilities in Burlington, Wash. and Stockton, Calif. The company said it expects to create 100 new jobs once the DLH facility is fully operational.



Home Depot sells two “rapid deployment centers”

The Home Depot Group sold two of what it terms  “rapid deployment centers” in Alabama and Georgia to The Inland Real Estate Group for $59.2 million at approximately $45 per square foot, according to the purchaser. The home improvement retailer leased back the close to 1.32 million square feet in industrial space for 18 years. The facilities are only a year old are 657,600 square feet each. CB Richard Ellis represented Home Depot. Inland used in-house representation.



Lowe's honors BNSF Logistics

BNSF Logistics LLC announced today that Lowe's Companies, Inc. has selected BNSF Logistics as its 2008 "New Store Van Carrier of the Year." BNSF Logistics said it provides capacity and transportation management services in support of Lowe's new store construction and fixture programs.

Lowe's, based in Mooresville, N.C., presented several service awards and nine specialty awards at its annual carrier conference. The specialty awards recognize the "best of the best," according to Steve Palmer, Lowe's vice president of transportation.



VPA sees continued cargo decline for 2009 fiscal; pushes major terminal development
launch to 2010

The Virginia Port Authority reported a 5.5 percent decline in container traffic at its Port of Hampton Roads from July through December of 2008 compared to a year earlier, and foresees a 6 percent decline through June 30, the end of its 2009 fiscal year.

“The terrible numbers we’re seeing now should level off a bit…but really, at this stage, nobody knows,” said Thomas Capozzi, senior marketing manager of the VPA at the board of commissioners bimonthly meeting yesterday.

The VPA has requested $356 million from the upcoming federal stimulus package for its $2.5 billion marine terminal development at Craney Island in Portsmouth. In addition, the state of Virginia has requested $9 million in funding to help with the construction of a second rail line to the APM Terminal facility in Portsmouth.

Jeff Florin, the VPA’s newly-appointed deputy executive director of operations, said the launch of construction for the new 600-acre terminal has been bumped from July of this year to the same time frame in 2010, citing the economic slump as a primary factor. Port officials have revised the terminal’s completion date to be as far out as 2020, which is three years later than the original estimate.


Technology introduces web services
for carriers announced both its second anniversary and a new web-based platform for what it terms “real-time shipping scheduling information” yesterday.

The online shipping solution said it has been adding data from 27 top carriers for the past two years, leading to 8 million voyage records in one searchable database. The New Jersey-based company claims its website is used by more than 5,000 unique visitors per month from around the world. said it offers hosting of any carrier schedule through either direct EDI or an XML connection, and has added web services technology to provide carriers with the option to offer up-to-the-minute information for their customers.

The company said the introduction of its new web services for sailing schedules is a contrast to having traditional direct EDI connections to carriers, or manually going to multiple sources to gather data.

Web services will enable to rapidly gather data from multiple sources, providing users with the scheduling information and other data they need for their container shipments, the company said.  For example, the company says that every time a user conducts a schedule search via, a Web Services "call" can be made to obtain the most recent schedule data direct from a carrier database and alongside the data, a call can be made for additional information such as vessel and documentation cut-off; enabling to put more information within reach of the users planning and booking shipments.

The web site is free to all shippers and forwarders and offers free schedule hosting to all carriers.


Thursday, January 29, 2009

Top Story

Florida ports form lobbying coalition

Several leaders of Florida ports met in Jacksonville yesterday and announced a new lobbying coalition meant to attract legislative funding for a state economic engine that the group says provides 350,000 jobs and contributes $74 million to the state’s economy each year.
The new Florida Maritime Leadership Coalition includes public seaports, transportation companies and organized labor operating in the state.

The FMLC’s formal launch in Jacksonville was meant to coincide with the quarterly meetings of the Florida Seaport Transportation and Economic Development (FSTED) Council and the Florida Ports Council, the group said.

The advocacy group cited an economic study conducted for the Florida Department of Transportation that found every dollar invested in port infrastructure improvements yields nearly $7 in economic benefit. However, while 70 percent of goods consumed in Florida arrive via our seaports, less than 2 percent of transportation funds are spent on expanding and improving ports, the group said.

The FMLC said its advocacy efforts would be broadcast through its website: The site will provide a steady stream of news and updates relevant to Florida's maritime transportation industry and those businesses that provide services to the industry, the FMLC said.



Shipping investor offers 20 Supertankers to oil speculators

Taipei-based shipping investor Nobu Su announced plans to plans to offer his fleet of 20 supertankers of two-million-barrel capacity each to speculators who might harbor the strategy of storing crude and betting that prices will appreciate later this year, according to a Bloomberg report.

Su’s company, TMT Co. Ltd., said it would lease out its vessels at below-market prices in return for a share of the profits from oil trading.

Su said his fleet is capable of holding enough crude to supply Europe for two days.

“The oil price is very cheap… We get a lot of enquiries” about storing cargoes, he announced in London today.

According to the Bloomberg story, oil companies and banks including have stored as much as 80 million barrels of crude at sea based on the oil futures strategy.

Su said the marketing effort with his vessels is for investors willing to wait several months before selling the oil on the market.

TMT has said it will help investors by introducing them to oil traders. He also said his company might be willing to deliver oil cargoes it has on single-hull vessels in the Persian Gulf to the double-hull supertankers

The average price of storing 2 million barrels of oil on a tanker is about $57,500 a day, depending on the duration of the contract, the quality of the ship and its location, according to data quoted in the Bloomberg report from London-based shipbroker Galbraith’s Ltd.



Global changes reflected in PNW port results

The port authorities in Vancouver, B.C., and Tacoma, Wash. reported 2008 cargo business statistics with mixed results, reflected in part by global economic changes that started having impacts last year.

Port Metro Vancouver (PMV) reported its 2008 overall tonnage declined 10 percent compared to 2007.

The PMV said its auto trade had virtually no percentage change with 457,358 units passing through, and container business came at close to 2.2 million TEUs, down 3 percent, which was “stable” compared to other West Coast ports. The port claims it had 38 percent containerized market share among the Pacific Northwest Ports in 2008.

Commodities like coal, potash and petroleum showed increases, with petroleum products up 14 percent at 7.27 million tons.

Breakbulk, mineral and forest products declined, the latter of which was down 19 percent.

Another Pacific Northwest port, Tacoma, reported an up tick of 3.6 percent for total tonnage, and a drop of 3.3 percent for containerized cargo, handling 1.86 million TEUs in 2008.

The port said breakbulk was down 4.1 percent at 118,523 short tons, and auto business declined 9.1 percent to 159,079 units. Intermodal lifts came in at 407,993, down 15.2 percent. The port posted a 13.6 percent jump in grain at 6.79 million tons.

Tacoma reported $99.1 million in operating revenue, a 1.3 percent increase
over 2007.



SCSPA launches search committee for new CEO

On the heels of the recent news over the resignation of former CEO Bernie Groseclose, the South Carolina State Ports Authority announced today the formal launch of a 13-member search committee including business leaders and port stakeholders from across the state, charged with finding a new president and CEO.

Bill H. Stern, a Columbia, SC businessman and the vice chairman of the SCSPA, will head the search committee, which represents a cross-section of business, transportation, logistics and economic development, the port said.

“They are true leaders with a strong history of business accomplishments and public service. We are honored and humbled that they have agreed to serve for this important task,” said Stern.

In addition to Stern, the search committee members include:

  • Gayle O. Averyt, former chairman of Colonial Life & Accident Insurance and previous member of the SCSPA board
  • Philip L. Byrd Sr., president of Bulldog Hiway Express and chairman of the S.C. Trucking Association
  • S. Richard Hagins, retired Navy officer, small business owner and current SCSPA Board member
  • Robert L. Harrison, former president of Stevens Shipping & Terminal Co., Inc.
  • William B. Hewitt, former and current CEO and chairman of several corporations
  • Pamela P. Lackey, president of AT&T’s South Carolina operations and vice chair of the South Carolina Centers of Economic Excellence
  • Mark W. Propst, plant manager of The Timken Company and past chairman of the South Carolina Manufacturers Alliance
  • Douglas M. Robertson, former executive with several Fortune 500 companies and current SCSPA Board member
  • Ambassador Robert V. Royall, former banking executive, Ambassador to Tanzania, S.C. Secretary of Commerce and SCSPA chairman
  • Whitemarsh S. Smith III, president of the Charleston Branch Pilots Association and the current treasurer of the SCSPA Board
  • Joe E. Taylor Jr., Gov. Mark Sanford’s Secretary of Commerce and former president & CEO of Southland Log Homes
  • Ambassador David H. Wilkins, Ambassador to Canada, attorney and former Speaker of the S.C. House of Representatives

The group is expected to recommend a candidate or candidates for final consideration by the SCSPA Board, the port said.

“We will be looking for a leader that exhibits customer focus, vision, a demonstrated track record of performance, and strong team building and communication abilities,” said David J. Posek, chairman of the SCSPA Board.  “While we’re at an early stage, we have an exceptional committee and expect considerable interest in the position,” said Posek.



Services in France strangled
by national labor strike

France’s eight largest labor unions have forged a national strike that has the country’s cities and major services strangled. The massive strike is a response to President Sarkozy’s $34 billion economic stimulus package, which the unions have declared to be not good enough. The eight unions represent a majority of France’s unionized labor force of 1.9 million.

Trains, ports, schools, roads, state-owned telecommunications and utilities, some financial institutions, along with other public sector operations have been impacted, creating serious logjams throughout the country.

The French economy, the second largest in the EU, is estimated to contract 1.8 percent this year, its worst since World War II, along with unemployment  estimated at 9.8 percent this year and 10.6 percent next year, according to media reports.



Hyundai Heavy Industries forecasts 23 percent drop for 2009 new orders

The world's largest shipbuilder reported today that it expects new ship orders to drop 23 percent due to the global economic situation.

Hyundai Heavy Industries, in its fourth quarter earnings announcement, said it sees orders falling to $21.1 billion in 2009, compared to $27.5 billion in 2008, a two-thirds jump over the previous time period in 2007.
The shipbuilder reported posted a $623.9 million profit for the fourth quarter of 2008 due in large measure to a strong backlog of orders.

Hyundai said it was more bullish on orders for offshore facilities and plants in 2009 due to demand for energy exploration.



NYK launches trucking dispatch solution         

NYK North America announced is has signed an agreement to use IAS-Trinium's DispatchManager solution in order to automate the company's trucking company dray dispatch, work order and invoicing process.

"DispatchManager will eliminate the need to manually process invoices and work orders, enabling NYK to more productively utilize our staff in this challenging market, while also positioning us to more efficiently manage our growth over the coming years," said Greg Tuthill, senior vice president, operating services, NYK.

Tuthill said he expects DispatchManager to improve customer service by providing timely "proof-of-deliveries" to customers and faster work order issue resolution because all of the information will be accessible online and directly integrated into NYK's existing transportation management system.

With DispatchManager, NYK said its partner trucking companies would be able to submit invoices electronically in order to reduce errors and eliminate paperwork.

"With the automated invoicing, reporting capabilities, and online work order tracking and documentation, we anticipate a 25 percent increase in productivity due to the reduced amount of time NYK operations staff will spend on the phone, sifting through emails and chasing down faxes," Tuthill said.


Friday, January 30, 2009

Top Story

Freight rates favor DDGS bulk shipments
between U.S.-Asia

Bulk freight rates between the U.S. and Asia have declined dramatically for distiller’s dried grains with solubles (DDGS), a co-product of U.S. ethanol production, according to UsAgNet.

Before the global financial crisis, demand for food, feed and related commodities were high, especially in China and India. Bulk freight rates for DDGS between the U.S. and Asian countries could range from $130 to $140 per metric ton, the report said.

The cost per metric ton now for DDGS, corn and related, between the Asia and the U.S. is approximately $23, spurring a shift from containers to bulk shipping for these cargoes.

“The prices now favor bulk shipments. It is a big turn of events because last year it was mainly containers used as a shipping method. Taiwan was a country that was known for buying and selling in bulk. However, last year they were shipping nearly half of their corn in containers. Due to the current market, they are now back to shipping in bulk. The freight market has undoubtedly been a bit of a rollercoaster ride,” said Mike Callahan, senior director of international operations, Asia, for the U.S. Grains Council (USCG).

The USCG director in Southeast Asia, Adel Yusupov, said: "Containerization of agricultural trade between the United States and Asia started about five years ago, when we saw an influx of Chinese-made exports of manufactured goods, mainly flowing in containers. The return freight from the United States to China was offered by shippers at discounted levels, compared to bulk freight rates, so as a result we saw an increase in containerized exports of agricultural commodities."

The USAgNet report said devaluation of the U.S. dollar encouraged U.S. exports, putting containers in high demand and elevating container freight rates. Over the past few months, container rates were holding steadily above bulk, Yusupov said.

Approximately 3.2 to 3.5 million metric tonnes of DDGS are produced annually in North America, according to the DDGS department at the University of Minnesota.



Battles named acting executive director at Port of Houston

Wade Battles, the managing director of the Port of Houston, was named acting executive director of the port authority by its commission.

The port commission tapped Battles while it says it conducts a national search to replace Tom Kornegay, the retiring executive director of 17 years.

Battles has been managing director since 1999, and has directed responsible the Port of Houston’s administrative and operational departments. Previously, Battles had spent 15 years at the Port of Miami as assistant port director of marketing and public affairs.

“We are fortunate to have Wade Battles, a veteran in the maritime industry, to lead the Port of Houston Authority during this transition,” said Jim Edmunds, port commission president.

Kornegay had cited family reasons instigating the timing of his retirement.


Transport Financials

Japanese stock market drop includes big three shipping lines

The Nikkei 225 Stock Average tumbled after what had been its best week in 2009, taking Japan’s big three shipping lines with it, according to financial newswires.

Nippon Yusen K.K., the biggest shipping line in Japan, dropped 16 percent to 430 yen, upon the news that it, along with Mitsui O.S.K’s 12 percent drop to 527 yen, and Kawasaki Kisen Kisen’s 13 percent decline to 334 yen, scaled down fiscal-ending profit estimates due to a slowing of commodities demand in China and the record low of the Baltic Dry Index.

Meanwhile, other major Japanese companies sank on the Nikkei, with Toshiba and Nintendo losing more than 12 percent after they cut earnings targets due to slumping sales, and Fanuc Ltd. the top industrial-robot maker in the world, falling 6.7 percent.

The Nikkei 225 declined 257.19, or 3.1 percent, to close at 7,994.05 in Tokyo, after three days of advances, the biggest since December 19 of last year.


International Shipholding posts 55 percent
profit for 2008

International Shipholding Corp., the Mobile, Alabama-based transportation company, reported fourth quarter profit of $4.9 million compared with $3.4 million for the same quarter in 2007, a 30.7 percent increase. The company reported its income for the year spiked from $17.4 million in 2007 to $39 million in 2008, an increase of over 55 percent.

The company said it made money from the $15.9 million sale of a vessel, and another $4.8 million from a discontinued operation. Salvage values of three of its vessels were increased, allowed the company to offset one-time charges related to advisory and legal costs associated with the recent, failed $308 million takeover attempt by New York’s Liberty Shipping Group.

The company reported its operating income for the quarter increased by $3 million to post $5.4 million, largely due to additional revenue from the company's car-truck carriers.

Despite declining car shipments in the fourth, International Shipholding said it was able to successfully re-lease space to clients shipping large commercial and military vehicles.

CG Railway Inc., the company's rail ferry subsidiary of 115 railcars each, operated at about 60 percent capacity in December and January, the company said, and added it believes that this business sector will rise steadily through the first quarter of the year.


Horizon Lines lost $18.8 million in fourth quarter

Horizon Lines, the largest domestic ocean carrier in the U.S, posted an $18.8 million loss in the fourth quarter of 2008, compared to a $10.7 million gain in the same quarter of 2007.

The Charlotte, NC-based company’s revenue fell to $314.7 million from $316 million in the fourth quarter of 2007.

 “Volumes during the quarter were negatively impacted by the continued sharp downturn of our Hawaii market, and ongoing weakness in Puerto Rico, which is in its third year of recession,” said Horizon Chief Executive Chuck Raymond.

Horizon’s profit for the year was nearly $3.1 million, down from $28.9 million in 2007. The company posted growth in revenue to $1.3 billion from $1.2 billion.

“We believe that 2009 will be a very challenging year for the ocean transport industry, with the world economies likely sinking deeper into a recession and financial markets continuing in disarray,” said Raymond.



U.S. rail freight traffic down
for third week of January

U.S. rail freight traffic trended downward during the third week of 2009, the Association of American Railroads (AAR) reported today. Carload freight totaled 267,634 cars, down 14.6 percent from the comparison week in 2008, with loadings down 9.2 percent in the West and 22.1 percent in the East. Intermodal volume of 195,182 trailers or containers was off 7.1 percent from last year, with container volume falling 2.3 percent and trailer volume dipping 23.9 percent. Total volume was estimated at 28.4 billion ton-miles, off 13.4 percent from 2008.

Eighteen of nineteen carload commodity groups were off last week in comparison with last year, with the only increase being reported in the miscellaneous category of "all other carloads", which was up 4.1 percent.

For the first three weeks of 2009, U.S. railroads reported cumulative volume of 806,168 carloads, down 16.8 percent from 2008; 598,402 trailers or containers, down 11.9 percent; and total volume of an estimated 85.5 billion ton-miles, down 15.5 percent. Canadian railroads reported volume of 63,844 cars for the week, down 13.9 percent from last year, and 41,284 trailers or containers, down 12.3 percent. For the first three weeks of 2009, Canadian railroads reported cumulative volume of 178,890 carloads, down 20.9 percent from last year; and 126,217 trailers or containers, down 14.2 percent.

Mexican railroads reported originated volume of 11,205 cars, down 0.2 percent from last year's third week, and 4,908 trailers or containers, off 6.1 percent. Cumulative volume on Mexican railroads for the first three weeks of 2009 was reported as 30,799 carloads, down 9.5 percent from last year; and 13,732 trailers or containers, down 12.8 percent.

Combined North American rail volume for the three weeks of 2009 on 14 reporting U.S., Canadian and Mexican railroads totaled 1,015,857 carloads, down 17.3 percent from last year, and 738,351 trailers and containers, down 12.3 percent from last year.

Railroads reporting to AAR account for 89 percent of U.S. carload freight and 98 percent of rail intermodal volume. When the U.S. operations of Canadian railroads are included, the figures increase to 96 percent and 100 percent. The Canadian railroads reporting to the AAR account for 91 percent of Canadian rail traffic. Railroads provide more than 40 percent of U.S. intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.



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