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Summary for February 9 - February 13, 2009:
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Monday, February 9, 2009

Top Story

New California Trucking Association president
weighs in on state of industry

The just-elected, first female president of the California Trucking Association said being in California is the biggest challenge facing the trucking industry over the next few years, in an interview in the Inland Valley Daily Bulletin.

“We're one of the most regulated industries in the nation, let alone the world. We're getting hit hard by all angles,” said new CTA President Valerie Liese, who is also the owner of Jack Jones Trucking Inc, in Ontario, Calif.

“Over the past year, we've seen over 3,000 mid to large trucking companies shut their doors [nationwide], and that doesn't even include the smaller guys. That was mostly because of the price of diesel. Now we're seeing the larger carriers close down terminals and laying off thousands of workers. The larger union trucking companies are having to renegotiate their contracts. They're having to give the unions a percentage of the company in order to reduce all employee wages by 10 percent.  You're going to see even more large carriers going by the wayside this year,” she said.

Liese went on to say that with regard to new clean-air emissions requirements in California it will be survival of the fittest.

“Anyone who has the capital - if they're not leasing property and don't have huge expenditures - they'll be able to survive. We're going to be forced to raise our rates, but shippers want us to lower our rates. It's going to be a matter of making sure we're on a level playing field. You've got (truckers) running under the radar that shouldn't even be out on the road. It takes a small few to ruin the reputation of our whole industry,” she said.

Liese added that the type of stimulus the California trucking industry would like to see is the state being able “to do something to retain manufacturers and companies in the state, because they're scaring them off. In California, we're used to getting stepped on all the time. If they can offer incentives to businesses, you're going to see things pick up a lot quicker,” she said.

Liese said all of her salaried employees have taken 10 percent cuts in pay, with employees now needing to help supplement medical benefits. She said she’s ceased matching 401(k) funds.



Ford to export its cargo vans from Turkey to U.S. market this year

Ford Motor Co. announced it would introduce its European-style commercial cargo van – Transit Connect - to the U.S. market. The auto company said it would show the boxy vehicle at the Chicago Auto Show this week.

Manufactured in Turkey, the Transit-Connect is slated to be available in the U.S. this summer, and will be marketed to small-business owners looking for a customizable vehicle that can maneuver easily through city streets.

The cargo capacity of Transit-Connect is 143 cubic feet with a load capacity that is 6.5 feet long and 4.7 feet wide. Pricing for the commercial vehicle will starts at $21,000, the company said.

Ford has been selling a similar vehicle in Europe since 2003, with approximately 110,000 units selling in 2007, the company said.

The company said other European vehicles would hit the U.S. market including the Ford Fiesta, and a European version of the Focus.

The Transit Connect will get about 19 miles per gallon in the city and 24 mph on highways. Ford said it is planning to introduce an electric battery version of the Transit Connect in 2010.



MOL announces staged rate increases for Asia-Europe trade

Japanese shipping line Mitsui OSK Lines (MOL) announced it is going to raise freight rates in the Asia-Europe trade in three stages, beginning April 1.

MOL said its  “general rate restoration program” would launch with a westbound rate increase of $300 on April 1; rising another $300 on July 1, and the same amount August 1. Eastbound rates are to rise by $200 April 1 and another $200 September 1.

“While increased freight rates are never very popular, the current downward trend is completely unsustainable and MOL is confident customers will recognize the need to maintain stability and viability in their supply chain operations over the long term,” the company announced.



Old Dominion announces rate increase

Old Dominion Freight Line announced a general rate increase of about 5.6 percent to be effective Feb. 16, 2009.

"The general increase involves a restructure that provides for increases in our rates based on length of haul rather than the traditional across-the-board increases. The rate increase does not affect minimum charges in Intrastate, Interstate or cross border lanes. Although each customer will have a different financial impact based on the lanes and distance their shipments move, the overall impact of the increase is approximately 5.6 percent," said Rick Keeler, senior vice president of pricing and strategic development.

"Smaller increases will be taken on Alaska, Hawaii, Puerto Rico, Caribbean, and Mexico," he said.

 "The increase is necessary to offset higher costs as a result of new equipment, new service centers, state-of-the art technology, insurance costs as well as wages and benefits. We believe the increase is essential to continue to provide our customers with the value in technology and quality performance they have come to depend on," said Keeler.



UPS Freight improving transit times in Texas, Southern Oklahoma

UPS Freight announced it is improving transit times on 2,250 lanes throughout Texas and southern Oklahoma, in order to extend the reach of its one-day, intra-Texas service.

The improvements will include direct service to more than 385 zip codes while improving transit times between Texas and Oklahoma and major markets throughout the U.S., according to Todd Holt, vice president of UPS’ line transportation.

Examples of the faster transit times will include next–day service for Corpus Christi, Victoria and Kingsville to Houston and Dallas. The expanded next-day umbrella also covers movements between Wichita Falls, San Angelo and Lawton, Okla., to Dallas, Houston and Austin, the company said.

Among other Texas cities realizing faster transit times are Pampa, Amarillo, Brownwood and Del Rio. The improved transit times further allow customers in Lawton, Abilene, San Angelo and Wichita Falls to reach Atlanta in two days and Charlotte, N.C., in three, the company said.

UPS Freight said it has reduced transit time on some 15,000 lanes over the last two years and is the only U.S. carrier to offer customers the ability to manage, track and process both small package and LTL freight using the same software - .UPS Worldship and Quantum View Manage.

"At a time when the economy demands every transportation decision be made with the utmost care and consideration, the experience and reliability of UPS and UPS Freight continue to make our company the preferred choice,” said UPS Freight President Jack Holmes.



China to offer stimulus for shipbuilding sector

China’s central government announced it would offer a stimulus package to aid its shipbuilding sector due to what has been projected to be a 50-percent drop in orders this year, according to a state media report today.

Xinhua news agency cited China Association of National Shipbuilding of Industry forecast statistics that shipbuilding orders will drop to between 20 million dwt to 30 million dwt this year, compared to 58.18 million dwt in 2008.

Details of the stimulus have yet to be announced for the world's third-largest ship building country, which had been gaining market share on its Asia shipbuilding competitors.



Crowley recognized with safety award

Jacksonville-based Crowley Maritime Corporation announced it was recognized with the Gerald H. Halpin Safety Excellence award at the Signal Mutual board of directors meeting in Scottsdale, Arizona.

The award honors companies insured by Signal that demonstrate initiative and outstanding safety performance, according to Crowley’s statement.

"The award is only given in a year when a company clearly demonstrates outstanding accomplishments in safety performance as well as promoting safety initiatives for our maritime industry. Crowley has certainly demonstrated this safety leadership," said Joe Roach, Signal’s administration president, upon presenting the award to Crowley Vice Chairman and Executive Vice President Bill Pennella.
Crowley said it has created an Operational Excellence Management System to ensure operating excellence. The Management System is an integration of the OHSAS 18001 standard for occupational health and safety management; ISO 9001 quality assurance program; the International Management Code for the Safe Operation of Ships and for Pollution Control (ISM Code); the American Waterways Operators (AWO) Responsible Carrier Program (RCP) and the ISO 14001 environmental management system.

Established in January 1986, Signal Mutual Indemnity Association is reportedly the largest provider of longshore benefits in the U.S. with over 200 member companies. 


Wednesday, February 11, 2009

Top Story

Panama Canal sets deadline for new lock proposals 

The Panama Canal Authority (ACP) announced that March 3 would mark the deadline for the four consortia of more than 30 companies to submit proposals to design and build the new set of locks at the core of the Canal’s $5.25 billion expansion program.

The finalists of the pre-qualified consortia are Consorcio C.A.N.A.L.; Consorcio Atlántico-Pacífico de Panamá; Consortia Bechtel, Taisei, Mitsubishi Corporation; and Consorcio Grupo Unidos por el Canal.

“All ACP contracts undergo a very rigorous process to ensure fairness and transparency,” said Panama Canal Authority (ACP) Administrator/CEO Alberto Alemán Zubieta. “As the largest and most important contract under the Canal Expansion Program, the ACP has taken additional measures to ensure that the contracting process is airtight, complies with Panamanian law, and is managed by experts and audited by a third party to certify thoroughness and transparency.”

The ACP said that on March 3, the consortia submissions would be separated into two submissions – price and technical proposals. The price proposals will be moved to an independent and secure environment and will not be reviewed until the technical proposals have been evaluated and points computed, the ACP said. 

In March of 2007, the ACP held what it termed an informative conference that attracted more than 800 participants, representing 324 companies from 29 countries – including 21 of the largest contractors in the world.

Since then, the ACP said the bidding for the contract to design and build the new set of locks has undergone an 18-month-long process, including meetings, consultations and adjustments to the Request for Proposal (RFP) – in order “to attract the most talented companies.”

The actual bidding process for the new locks began in August 2007, when the ACP released its Request for Qualifications (RFQ). During this pre-qualification stage, the ACP said it evaluated responses (also called Statements of Qualification or SOQ) from prospective firms based on a combination of pass-fail criteria and capabilities. The release of the RFQ was followed by an informative meeting and new locks construction site visits.

In December 2007, the ACP announced that the four global consortia met the minimum pre-qualification requirements and would move forward with their bids to design and build the new locks.

Deloitte will oversee the technical aspect for the new third set of locks contract. Specifically, Deloitte will work closely with the ACP to audit, verify and certify that the ACP’s Evaluation Committee follows the rigorous analysis process to evaluate the technical proposals to be submitted by the qualifying consortia.

In related news, the Panama Canal Authority is forecasting a 5 percent drop in the amount of cargo that will pass through the waterway this year due to the global economic crisis, according to an AP report.

Rodolfo Sabonge, the canal's vice president for marketing was quoted as saying that 294.1 million tons of cargo are expected to pass through the canal this year, compared to 309.6 million tons in 2008.



Wal-Mart sales up 2.1 percent in January

Bentonville, Arkansas-based Wal-Mart Stores, the world's largest retailer, announced its same-store sales – stores open at least one year - climbed 2.1 per cent in January at $27.7 billion with the strongest sales returns in groceries, health, pet and baby care products. The company reported its Sam’s Club warehouses rose 2.4 percent.

The sales results surpassed Wal-Mart's own forecasts, which had pegged revenue to between zero and 2 percent, the company said. The company said its international sales were down 7 percent at $6.65 billion, due to the stronger dollar.



CN and Norfolk Southern announce “MidAmerica Corridor” alliance

The Canadian National (CN) and Norfolk Southern (NS) railroads announced on Tuesday an initiative to create a "MidAmerica Corridor" in which the railroads will share track between Chicago, St. Louis, Kentucky, and Mississippi in order to establish shorter and faster routes for merchandise and coal traffic moving between the Midwest and Southeast, they said in a joint statement.

The railroads said that the initiative, when finalized, would have three components. First, NS will haul CN freight between Chicago and St. Louis, reducing the distance between these points for CN shipments by 60 miles and providing improved connections to other rail carriers through the St. Louis gateway.

Second, NS will use CN's routes between St. Louis and Fulton, Ky., as part of a new, more efficient route from the Midwest to the Southeast, saving more than 50 miles on NS shipments, the railroads said.

Third, CN will haul NS freight between Chicago and Fulton, shortening NS's Chicago-to-Birmingham route by almost 100 miles.

As part of the MidAmerica Corridor, CN and NS plan to create a new coal gateway at Corinth, Miss., to better link NS-served southeastern utility plants with CN-served Illinois Basin coal producers.

A key component of the new initiative is the West Tennessee Railroad between Fulton and Corinth, which will be upgraded to handle heavier shipments and additional rail traffic, the railroads said.

E. Hunter Harrison, president and chief executive officer of CN, said: "This innovative track-sharing arrangement will expedite our customers' shipments, improve asset utilization and generate new efficiencies for both CN and NS."

Wick Moorman, chief executive officer of Norfolk Southern, said: "The MidAmerica Corridor is an important partnership that will create better routes for shippers on both railroads. On the Norfolk Southern system, it will help level demand on our busy north-south routes, while improving service and velocity for many more customers."

The initiative will be finalized with the completion of definitive agreements and approval for the exchange of trackage rights with the U.S. Surface Transportation Board in the next few months, the railroads said.



NOL net profit dropped 84 percent in 2008

Neptune Orient Lines (NOL), the Singapore-based shipping group, reported net profit of $83 million for 2008, a drop of 84 percent compared to 2007. Revenue was up 14 percent in 2008 at 9.3 billion over 2007. The company reported 2008 pre-tax-and-interest earnings of $213 million, a 64 percent decline from the previous year.

NOL also reported a fourth-quarter net loss of $149 million compared to a profit of $196 million from a year earlier, as its cargo volume fell 14 percent for the quarter. Average containerized freight rates gained 7.2 percent for the period to $3,077 per FEU.

"Though we recognized early the pattern of decline in market conditions, and took decisive action to reconfigure our business, the adjustments could not fully counter the speed and dramatic nature of the downturn being experienced in global container trades," said Ron Widdows, president and chief executive officer of NOL.

“Reduced consumer demand worldwide, coupled with excess supply of new vessel tonnage is creating a very difficult business environment,” the company said.

NOL reported in November that it would cut 1,000 jobs - 9.1 percent of its workforce - primarily in North America, and that it would cut capacity in its Asia-Europe trade by 25 percent, and the trans-Pacific by 20 percent.



Long Beach port dedicates new $21 million security center

The Port of Long Beach announced the official opening of its new 25,000 square-foot, $21 million Security Command and Control Center at a ceremony on Monday.

The port said the security center will serve as the port's security division headquarters and as a coordination and communications hub for security agencies that protect the harbor complex.

The $21-million facility was designed and built to "silver-level" Leadership in Energy and Environmental Design (LEED) standards, the port said.

The center includes offices for the various local and federal agencies and maritime organizations that make up the multi-jurisdictional system that protects the harbor complex to better coordinate communication, the port said.

"We have one of the most innovative security operations of any seaport in the United States, and this Command and Control Center further adds to our ability to provide the best possible protection," said Long Beach Board of Harbor Commissioners President James C. Hankla.
In addition to the new security center, the port said it has also added the following in recent years: harbor patrol officers; a harbor patrol dive team; surveillance cameras [CW1] throughout the harbor; and optimized communications by bringing a high-speed fiber-optic network to the port.

The center will also house what the port terms a "maritime domain awareness [CW2] room" that will have the ability to combine and display on screens and computers all the surveillance and monitoring data from throughout the port.


CMA-CGM part of consortium in Syrian container terminal

The French shipping group CMA-CGM, announced it has executed a concession agreement with the Lattakia Port General Company (LPGC) to manage and operate a container terminal in the Syrian port of Lattakia for a period of 10 years, with the option of up to 15 years.

The Lattakia Container Terminal is to be operated by a consortium composed of CMA CGM/Terminal Link at 51 percent, and Souria Holding, a Syrian limited liability company, at 49 percent.

Located in Western Syria, 186 km southwest of Alep and 90 km north of Tartous, Lattakia is Syria’s main port in the Mediterranean, CMA reported. The container terminal is located on a 69-hectare area with 972-meter quay and a total depth ranging between 11.8 m and 13.3 m, the company said. The facility handled a total of 570 000 TEUs in 2008, the company said.

The new consortium said it plans to increase the terminal’s capacity to 1 Million TEUs by 2012 thanks to infrastructure and equipment investments throughout the concession period.

The Lattaki Container Terminal is CMA CGM’s 29th investment in port terminals worldwide, and operations are to begin in July of this year, the company said.



FedEx Freight to cut 900 jobs

FedEx Freight announced yesterday it is going to cut about 900 jobs at 130 facilities due to the economic environment.

"There has been greater than anticipated deterioration in the LTL market, and the pricing environment has become even more aggressive as the same number of carriers compete for a shrinking base of business," said FedEx Director of Issues and Crisis Management Maury Lane, in an email to Reuters.

The company said some staff will be offered the chance to transfer within the company, or will be laid off with the chance of being recalled.

FedEx' said its National LTL unit is not impacted by the cuts.



Taliban torches NATO containers

Taliban guerrillas torched eight containers that were transporting supplies out of Afghanistan to allied forces in Pakistan, according to media reports out of the region. 
The containers were returning to Pakistan from Afghanistan when they were sabotaged in the Khyber Agency region, the reports said.

Several hundred supply trucks, trailers and containers were torched at terminals in Peshawar, capital city of the Northwest Frontier Province in December.


Thursday, February 12, 2009

Top Story

PNW niche port news: Rail line purchase and new Ro-Ro service 

Port of Coos Bay to receive $12.6 million loan from state of Oregon for rail line purchase

The Oregon Economic and Community Development (OECD) Commission approved  $12.6 million in bridge loans enabling the Port of Coos Bay to purchase a rail line that was shut down by Central Oregon & Pacific Railroad, the OECD and Port Authority jointly announced.

The 120 miles of track running between Coos Bay and Eugene was closed in September of 2007, cutting off direct rail freight service out of the port for several customers, especially in the forest products and gas sectors.

“This rail line is critical to the future economic stability for the Southern Oregon Coast,” said Tim McCabe, director of the OECDD. “This bridge loan is important because of the timeline imposed on the purchase of the line and is one way the state can help preserve jobs and economic opportunities for Southern Oregon,” he said.

“Today is a great day for Oregon and the South Coast region,” said State Rep. Arnie Roblan (D-Coos Bay). “This has been a difficult and uncertain period for the entire region, and we are excited to move forward with a plan to preserve this critical component of our local manufacturing economy.”

The parties concerned announced the $16,605,987 purchase would be completed by February 18, 2009.

First auto shipments for Port of Grays Harbor

The Port of Grays Harbor announced the 579-foot Pasha Hawaii Transport Lines Ro-Ro vessel MV Jean Anne loaded over 1,100 Hawaii-bound autos for what the port said was its first outbound shipment of autos. The port said it handled its first inbound shipment of 3.100 cars in mid-January. The Pasha Group and Grays Harbor entered a joint marketing agreement last month, the port said.

“We are pleased to offer this direct call to Grays Harbor, which demonstrates our ability to create lead logistics solutions to meet our goal of exceeding our customers’ needs and expectations, ” said Pasha Group CEO George Pasha IV.



UPS elects Heinz CEO to independent director post 

The board of directors of United Parcel Service announced yesterday in a statement the election of William R. Johnson, the chairman, president and CEO of the H.J. Heinz Co., as a new independent director of the company.

Johnson will join the board immediately, the company said, and then stand for regular election to a one-year term at the UPS annual shareowner's meeting on May 7.

Johnson has been chairman, president and chief executive officer of Heinz since 2000. Johnson also serves on the board of directors of Emerson and the Grocery Manufacturers of America.



Beijing transport companies offered zero percent financing for going green

In an effort to spur more low-emission commercial freight traffic in Beijing, the municipal government there announced up to two years, zero-percent financing subsidy can be applied for on bank loans for such vehicles if purchased between Jan 1 and June 30 of this year, according to a report in the China Daily on the government’s press conference announcement.

For vehicles purchased between July 1 and Sept. 30, the government said it would subsidize 18 months worth of interest and a year’s worth if purchased between Oct. 1 and Dec. 31.

The subsidy is part of a campaign in Beijing to phase out what the government refers to as heavily polluting "yellow-label" vehicles, of which 80n percent of the city’s 120,000 freight vehicles are currently classified, the report said.

The deputy director of the Beijing’s transportation bureau told the press conference that municipal government wants 20,000 clean trucks on its roads by October, and 50,000 within the next three years, the report said.


Wine logistics firm announces carbon neutral shipping program

San Francisco-based Copper Peak Logistics announced the unveiling of what it termed “the industry's first carbon neutral shipping option.”

Copper Peak said it would cover the cost to offset carbon emissions associated with its consumer direct wine shipments. Copper Peak said its clients can also make voluntary, per-package financial contributions.

Copper Peak said it would purchase carbon offsets from San Francisco-based provider Village Green Energy “to ensure that client shipments are not only carbon neutral, but actually carbon negative.”

The offsets purchased for every 1000 consumer direct wine shipments have the carbon dioxide equivalent of removing one car from the road for a year, the company said.

"We're choosing environmentally friendly products where possible, and purchasing offsets and renewable energy to mitigate the impact of our energy use," said Copper Peak Senior Director Paul Klein.

Three California wineries have already signed on as participants in Copper Peak's carbon offset program, the company said, including Robert Sinskey Vineyards, PlumpJack Wines and Venge Vineyards.

The carbon offsets purchased through Village Green come from a new carbon-cap-and-trade market that opened in the Northeastern United States entitled the Regional Greenhouse Gas Initiative (RGGI), Copper Peak said. RGGI requires power plants to hold a carbon permit for each ton of carbon dioxide they emit, and over time the regulators reduce the number of permits available. By purchasing and retiring these RGGI permits, Copper Peak said it tightens the cap on polluters and forces them to invest in energy efficiency and renewable energy to reduce their greenhouse gas emissions.


Transportation Equipment

Greenbrier announces layoffs

The Greenbrier Companies, the Lake Oswego, Oregon-based manufacturer of railcars and marine barges, announced in a statement on Wednesday it is cutting workforce, reducing wages and implementing other cost-cutting measures due to what it termed continued softness in the railroad supply market.

The company said its cost-cutting measures would result in annualized savings of $16 million.

Layoffs and early retirements are to commence this week, the company said, impacting about 150 employees at its Gunderson and Concarril new railcar facilities, and at various Greenbrier Rail Services railcar repair and refurbishment shop locations. The company said staff would also be reduced at its corporate offices in Lake Oswego and other office locations around North America. The company said further cost reductions would take place at its European railcar operations as well.

Greenbrier said it would likely consolidate production and shutter one of its facilities in Mexico this summer until rail demand improves, which could impact 700 workers.

William A. Furman, president and chief executive officer of Greenbrier, said the marine backlog at the company’s Gunderson barge-building facility in Portland has strong backlog, but if market demand does not support continuous new railcar production there, about 70 workers will be moved to marine and railcar refurbishment and repair in late spring, and approximately 150 workers would be furloughed or laid off.

Greenbrier builds new railroad freight cars in its three manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 38 locations in North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. The company owns approximately 9,000 railcars, and performs management services for approximately 137,000 railcars.



Kenco to manage Whirlpool distribution center

Kenco Logistic Services LLC announced it has been awarded the management contract for an 869,000 square-foot regional Whirlpool distribution center in Fort Worth, Texas. Kenco said it would keep most of the 170 employees at the facility, previously managed by Penske Logistics.

Kenco said it has worked with Whirlpool since 1979; with the latest facility, now manages almost 6 million square feet of warehouse space for the appliance manufacturer.



Activu installs software system in Long Beach security center

Activu Corporation announced the installation of a “distributed information display and visualization system” in the new security command and control center that opened at the Port of Long Beach this week.

Activu said the system “enhances collaboration capabilities and security coordination between multiple federal, state and local security groups.”

Activu said: “The port and their prime contractor partner Adesta selected Activu's solution because it offered a net-centric and custom designed approach to multi-site display and distributed collaboration.”

Activu said the software system is integrated into the building's standard IP network.


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