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Summary for February 16 - February 20, 2009:
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Tuesday, February 17, 2009

Top Story

U.S.  Transportation Command awards $300 million in Pacific shipping contracts

The U.S. Department of Defense announced on Friday that it is awarding $300 million in shipping contracts for services between the U.S. West Coast and Guam as part of the U.S. military’s massive buildup there.

The contracts originated from U.S. Transportation Command’s Directorate of Acquisition out of Scott Air Force Base in Illinois, and will include ocean and intermodal freight work, running from March 16 through November of this year.

The shipping awards at this juncture are going to the following companies:

Horizon Lines - $100 million
Matson Navigation - $100 million
Pasha Hawaii Transport Lines - $60 million
American Roll-On-Roll-Off Carriers - $40 million

By 2014, approximately 8,000 Marines, and 9,000 family members, from Okinawa are scheduled to relocate to Guam at a cost of about $20 billion.


Freight Infrastructure

Railroad group commends stimulus bill

The Association of American Railroads commended the congressional passage of the $787 billion American Recovery and Reinvestment Act of 2009, which is expected to be signed by President Obama today in Denver.

"Freight railroads are the most efficient form of ground transportation, moving a ton of freight an average of 436 miles on a single gallon on fuel. We’re glad the Congress recognizes that rail projects will create jobs and improve the environment," said AAR President and CEO Edward R. Hamberger.

The bill includes approximately $50 billion in funds for transportation projects, with $27.5 billion to be provided for Department of Transportation highway formula grants to the states. Rail transportation projects as well as transit, ports, and highways and bridges are eligible under the program.

"This bill represents a huge victory for both passenger and freight rail," said Hamberger. "The additional flexibility that was provided opens up the possibility for critical investment in rail projects that will improve the efficiency of our nation's freight transportation system."

"Rail projects like the CREATE project in Chicago, have local, regional and national significance and will create jobs immediately. Each $1 billion of rail investment creates 20,000 jobs," Hamberger added. "An investment in freight rail is going to help get America moving forward."



Polo Ralph Lauren to take direct control of Southeast Asia distribution in 2010

Polo Ralph Lauren Corporation announced today it reached an agreement to take direct control of its wholesale and retail distribution in Southeast Asia from Dickson Concepts International Ltd., beginning January 1, 2010. Dickson Concepts will continue to operate as licensee in the region through December 31, 2009. Polo Ralph Lauren’s Southeast Asia region includes China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand.

“Today’s announcement represents a significant strategic step for our Company as we continue to develop our business globally,” said Ralph Lauren, chairman and CEO. “The appetite for our brand and products in Southeast Asia is strong and growing, and we expect to build on the momentum by reinforcing our luxury lifestyle positioning and elevating our distribution in the region,” he said.

“Southeast Asia is a dynamic, emerging market with incredibly strong growth characteristics,” said Roger Farah, president and COO. “We are grateful to Dickson Concepts for enabling us to establish Polo Ralph Lauren as a premier lifestyle brand throughout the region over the last two decades, and we look forward to working closely with them on a smooth transition. The work we will undertake to develop Southeast Asia is similar to what we’ve done successfully in Europe and are currently executing in Japan. With control of our distribution, we intend to leverage our world-class managerial, marketing and merchandising capabilities to deliver significant revenue and profit growth over the long term,” he said.

Dickson Concepts International Limited currently distributes Polo Ralph Lauren products through approximately 40 freestanding stores and nearly 100 “shop-in-shops” throughout Southeast Asia, the company said.



TNT acquires LIT Cargo of Chile

TNT announced the acquisition of LIT Cargo, an express delivery company in Chile. The acquisition, according to TNT, gives the company a strong nationwide road network in Chile and strengthens its position in the country’s domestic express delivery market. The company said the LIT Cargo acquisition “adds a key building block to the development of its South American Road Network (SARN), linking Chile to Brazil and Argentina.”

LIT Cargo is a family-owned road express company with 1,500 employees. The company operates a nationwide, highly automated express parcel network, comprising of 55 depots and 496 vehicles. LIT Cargo’s compound annual revenue growth of 25 percent over the past three years has outpaced that of the Chilean market, according to TNT, and has been serving markets that include automotive, pharmaceuticals and high tech.



Houston port commission considers $33.8 million crane purchase from ZPMC

The Port of Houston Authority commission announced it would consider $33.8 million for electric cranes at Bayport Container Terminal

The commission said it has been asked to authorize a contract to Shanghai Zhenhua Port Machinery Company, Ltd., for three dockside electric container cranes for Bayport Terminal.



National Retail Systems deploys “clean truck”
fleet in L.A.-Long Beach

National Retail Systems, Inc. (NRS), announced today it would operate 115 of what it termed “privately-financed clean trucks to avoid additional fees for customers” at the ports of Los Angeles and Long Beach in order to comply with the Clean Truck program there, which launches tomorrow, Feb. 18.

The two big Southern California ports have instigated a not-for-profit company called PortCheck to collect a $70 per-FEU fee for shipments entering and leaving the port on non U.S. EPA 2007 compliant trucks.

Cargo owners will be responsible for paying the Clean Truck fee tomorrow before a loaded container can enter or exit a marine terminal in either port.

"We primarily serve retailers and our customers just can't incur extra supply chain costs in this economy," said Raymond Wisniewski, president ad COO of NRS. "That's why we have been planning since early last year to ensure a smooth transition for our customers. Using our new Clean Air fleet, they will avoid the fees and also help to improve the environment in Los Angeles and Long Beach," he said.
NRS said it has deployed a Clean Truck pier fleet with capacity to handle 70,000 TEUs in imports per year, with plans to increase the fleet to handle 300,000 TEUs by the end of 2009.

NRS said it is a partner in the U.S. Environmental Protection Agency's SmartWay Transport Partnership, and last year received the highest possible score of 1.25 during EPA's SmartWay FLEET performance evaluation.



HPH Americas selects AuthenWare biometric security software

AuthenWare, a software provider, announced today that Hutchinson Port Holdings Group (HPH) has selected its patent-pending AuthenTest software to handle security interactions between its customers and U.S. Customs for its Americas operation.

"We evaluated other biometric solutions such as tokens, security cards, and other traditional solutions but found them to be inadequate for our needs," said Pedro Maidana, CIO at Hutchinson. "We selected AuthenTest because it is cost-effective, easy to implement, requires no special hardware, and most importantly, it is non-intrusive to our users."

HPH Americas is implementing AuthenTest to increase the security of the interactions between its customers and customs declaration systems, AuthenWare said, by supplying a portal for customers declaring goods entering or leaving the port.

AuthenTest reportedly offers a different approach towards handling security by not only securing information access through keystroke biometrics, but also by rendering any stolen credentials useless through a proprietary protocol that creates and maintains a unique personal security pattern for each user every time that he or she enters data using the keyboard, such as with user name and password.


Thursday, February 19, 2009

Top Story

STB fines BNSF $345 million 

The Burlington Northern Santa Fe Railroad was fined by the U.S. Department of Transportation’s Surface Transportation Board for charging what it termed to be undue high rates to two “captive” coal shippers.

The shipper had challenged BNSF’s haulage fees from the Powder River Coal Basin in Wyoming to electricity plants in nine states, according to a statement released by the STB.

The Western Fuels Association and Basic Electric Power Cooperative were both “captive shippers” to the BNSF, the STB said, finding BNSF’s rates to be “roughly six times the variable cost of providing service,” therefore making them “unlawfully high,” in the STB’s ruling.

The BNSF has been ordered to reduce its current rates by 60 percent and pay the utilities $100 million for overcharges from 2004 through 2008. The STB has also required the BNSF to cap its rates at this level through 2024.

STB Board Chairman Charles D. Nottingham said: "Today's unanimous and bipartisan decision demonstrates the Board's commitment to delivering strong regulatory oversight over the freight rail market when necessary to protect captive shippers from monopoly pricing. The ultimate beneficiaries of this decision are consumers in Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming who are served by this captive electric utility plant. Those customers have been bearing the burden of these unreasonably high transportation rates in their monthly electric bills, a burden they should no longer be forced to bear."

The BNSF responded to the decision with: “BNSF strongly opposes the STB's decision on its merits and believes the process used to arrive at this result is unfair. Despite ruling in BNSF's favor once, the STB substantially revised its large rate case rules, and then allowed the shipper to submit a reconfigured new case. BNSF believes that this case is a manipulation of the new rules and represents an outcome-oriented decision in favor of this shipper. If this ruling stands, it would be the largest award for any shipper in the history of coal rate litigation. BNSF believes that the rates in question that it has charged the shipper are reasonable from both a market and regulatory perspective.”



Report: Logistics sector to benefit from China stimulus package

China is going add the logistics sector to its $586 billion stimulus package, according to sources close to the situation cited in a Reuters China report today. The stimulus package was to originally cover 10 industries, including auto, steel, textile, shipbuilding and information technology sectors, the report said. No further details on the proposed logistics bailout have been reported yet.



Grand Alliance and Zim forge PNW pact

The Grand Alliance shipping consortium announced a cooperative agreement with Israel’s shipping line, Zim, on two weekly strings, with Zim deploying three 8,000-TEU vessels, and the Alliance providing eight vessels at the same size.

The 42-day NWX rotation will be: Ningbo, Shanghai, Qingdao, Busan, Seattle, Vancouver (Vanterm), Tokyo, Nagoya, Kobe and Ningbo.

The 35-day PNX rotation will be: Singapore, Laem Chabang, Shekou, Hong Kong, Kaohsiung, Vancouver (Delta port), Seattle, Busan, Kaohsiung, Hong Kong, Shenzhen (Shekou) and Singapore.

The Grand Alliance consists of: Hapag-Lloyd, MISC Berhad, NYK and OOCL.



Virginia port revenue earmark bill fails in state senate 

A bill that woud have aportioned future revenues from the Virginia Port Authority for transprotation projects in Hampton Roads, failed the necessary state senate votes 12-4 this week, according to a report in the Virginian-Pilot.

The legislation was meant to spur the same fund-collecting concept for road and related work in other regions of the state, including Northern Virginia and Richmond, the report said.

Thiry cents of every dollar above the $1.2 billion the port already raises for the state would have been funneled into state transportation funding and capped at $300 million for Hampton Roads projects, the report said.


Malta could become hub for Chinese shipping in Med

Transportation and maritime officials from China and Malta are going to meet next week in Beijing to discuss, among other transportation-related issues, making Malta a maritime hub in the Mediterranean for Chinese shipping companies, The Malta Business Weekly reported.

Zhang Yu Cheng, commercial counselor of the Chinese embassy in Malta told the paper: “I can certainly confirm that China also sees Malta as strategic location from which to do business with both Europe and the North Africa-Middle East region.”

The Maltese archipelago nation consists of three islands and is centrally located in the Mediterranean.


Hong Kong, Singapore ports down in January

The Hong Kong Marine Department released its January statistics with 1.622 million TEUs handled, a decline of 23.2 percent over the 2.11 million TEUs in January of last year.

Singapore's Maritime and Port Authority reported a 19.6 per cent decrease in container volume in January, at 1.974 million TEUs handled compared to 2.455 million TEUs in January of last year.



UPS deploys 300 “Green” trucks

United Parcel Service announced today it has deployed 300 new delivery trucks powered by what it termed “Compressed Natural Gas (CNG), to seven cities in Colorado, Georgia, Oklahoma and California.

The CNG vehicles are part of an order placed last May, the company said, and adds to what UPS says is “the largest private fleet of alternative fuel vehicles in its industry - 1,819 in total with these additions.”

UPS said the new CNG trucks have been deployed over the past month are in service in Denver (43); Atlanta (46); Oklahoma City (100), and four cities in California: Sacramento (21), San Ramon (63), Los Angeles (9) and Ontario (18). 

"Deploying alternative fuel vehicles dates back to the early days of UPS and this CNG deployment is one more step towards the greening of the our fleet," said Robert Hall, UPS's director of vehicle engineering. "Continuing to add CNG delivery trucks to our fleet is a sustainable choice because natural gas is a cost effective, clean-burning and readily available fuel."

The 300 trucks deployed over the past month were built from scratch as CNG vehicles, adding to more than 800 CNG vehicles already in use by UPS worldwide, the company said.

The CNG truck bodies are identical externally to the signature-brown trucks that comprise the UPS fleet, the company said. Marked with decals as CNG vehicles, the trucks are expected to yield a 20 percent emissions reduction over the cleanest diesel engines available in the market today, the company said.

UPS said it began deploying alternative fuel vehicles in the 1930s with a fleet of electric trucks that operated in New York City. 



DB Schenker signs global deal with cold chain box provider Envirotainer

Logistics provider DB Schenker announced it signed a global lease with Envirotainer AB, a provider of active temperature-controlled air cargo containers.

Schenker said the deal would allow them to expand its temperature controlled logistics business, especially in the healthcare and pharmaceutical markets.

"This new form of cooperation will leverage our performance for our healthcare customers in secure and temperature controlled supply chain," said Thomas Lieb, chairman, Schenker.


Friday, February 20, 2009

Top Story

Nike to build largest distribution center in China

Nike has announced plans to invest $99 million to build what is expected to be the largest distribution center in China, and the company’s biggest in Asia, at almost 1.3 million square feet.

The Nike China Logistics Center will located in the Taicang Economic Development Area of Jiangsu Province on China’s east coast.

The facility will initially distribute Nike's footwear, apparel, and equipment products with room to expand for other brands, the company said.

Construction of the distribution center is supposed to begin this spring and be operational by third quarter of 2010.

Willem Haitink, vice president and general manager of Nike China, said the new distribution center would help reduce delivery times by up to 15 percent.

"The plan of building such a logistics center has fully shown Nike's confidence in the Chinese market," said Zhu Jinqian, Nike’s media director for China.

Nike currently has seven distribution centers around the world, located in countries that include Belgium, Canada, Japan, South Korea and the U.S.



U.S. exports grew 12 percent, imports climbed 7.4 percent, in 2008

U.S. exports of goods and services grew by 12.0 percent in 2008 to $1.84 trillion, while imports increased 7.4 percent to $2.52 trillion, according to the U.S. Department of Commerce Census Bureau and the Bureau of Economic Analysis.

In December 2008, the U.S. goods and services trade deficit at $39.9 billion was the lowest monthly deficit since February 2003, which led to a 3.3 percent improvement in the annual goods and services deficit for 2008, Commerce said.

Exports comprised 13.1 percent of U.S. GDP in 2008. To put in historical context, exports were 9.5 percent of U.S. GDP in 2003, and 5.3 percent in 1968.

The largest export markets for U.S. goods in 2008 were Canada at $261.4 billion, up 5 percent over the previous year, Mexico at $151.5 billion, up 11.4 percent, China at $71.5 billion, up 9.5 percent, Japan at $66.6 billion, up 6.2 percent, and Germany at $54.7 billion, up 10.2 percent.

Capital goods represented the largest goods export category for the U.S. with $469.5 billion worth of exports in 2008. The U.S. trade surplus in capital goods rose $12.8 billion to reach $15.7 billion in 2008, up from a surplus of $2.9 billion in 2007.

The top growth categories for capital goods products in 2008 were medicinal equipment, up $3.3 billion over the previous year, materials handling equipment, up $2.7 billion, industrial engines, up $2.7 billion, telecommunications equipment, up $2.6 billion, and civilian aircraft engines, up $2.5 billion.

Industrial supplies were the largest growth category in dollar value, accounting for $387.3 billion of U.S. exports in 2008, up $70.9 billion, at 22.4 percent, from 2007.

The top growth categories for industrial supplies in 2008 were fuel oil, up $19.3 billion over 2007, other petroleum products, (up $8.5 billion, non-monetary gold, up $5.4 billion, chemicals-fertilizers, up $4.5 billion, and steel-making materials, up $4.3 billion.

Foods, feeds, and beverages represented $108.4 billion of U.S. exports in 2008, and was the second largest export growth category (end-use) for the U.S., with exports rising $24.2 billion - 28.7 percent - over 2007. The U.S. trade surplus in foods, feeds, and beverages rose $16.8 billion to reach $19.4 billion in 2008, up from a surplus of $2.6 billion in 2007.

The top growth categories for foods, feeds, and beverages in 2008 were soybeans, up $5.6 billion, meat and poultry, up $3.7 billion, corn, up $3.4 billion, and wheat, up $3.0 billion.

U.S. services exports totaled $551.6 billion in 2008, climbing $54.4 billion, or 10.9 percent, from 2007. The rise in exports helped the U.S. to have a record trade surplus in services at $144.1 billion, up $24.9 billion, or 20.9 percent, from 2007, Commerce said.

The top services export categories were other private services, which includes items such as business, professional and technical services, insurance services, and financial services at $241.0 billion, travel at $111.5 billion, royalties and license fees at $91.1 billion, other transportation at $60.2 billion, passenger fares at $31.4 billion, and government services at $16.3 billion.


Air Cargo

Boeing delivers first 777 freighter to Air France

Boeing announced on Thursday the delivery of the company’s first 777 freighter to Air France.

“Our new Boeing 777 Freighter will operate very well with our 747-400ER Freighters," said Pierre Vellay, Air France’s executive vice president for new aircraft a corporate fleet planning. "Also, we will benefit from the airplane's commonality with our proven 777 passenger fleet and improve our cargo efficiency to help us through the current economic difficulties," he said.

The 777 Freighter can fly 4,880 nautical miles with a full payload of 226,700 pounds and the new Air France plane is expected to replace, over time, the 747-400 Boeing Converted Freighter (BCF) in the Air France Cargo fleet, Boeing said. Air France currently operates five 747-400ER Freighters and four 747-400BCFs.

In other air industry news, Giovanni Bisignani, the director of the International Air Transport Association announced on Thursday that of the 1,480 aircraft deliveries Boeing and Airbus have  scheduled, more than half could be deferred due to declining capacity demand and the weakened credit markets.



Former Oregon port director pleads guilty to contamination

The former executive director of the Port of Astoria pled guilty yesterday in federal court for violating the Clean Water Act, by allowing dredge spoil material into the Columbia River, violating the port’s federal permit, according to a report in the Oregonian.

Peter Raleigh Gearin faces maximum prison time of three years and fines, but probation will reportedly be recommended by the U.S. Attorney’s Office, the report said.

The conviction is from 2005, when the port needed to dump dredge spoil from a deepening project for its cruise business. After tests concluded the material was contaminated, the U.S. Army Corps of Engineers ordered the port to pump the dredge materials into containment ponds on land. The material was supposed to have been allowed to settle in the ponds and then tested before being released back into the Columbia River.

The ponds overflowed and an undisclosed amount overflowed into the bay because wooden gates that were supposed to contain the dredge spoil, were either taken out or never installed to begin with.

The Port of Astoria has also settled separate cases related to the incident and will pay total settlement costs of $170,000, and must have an environmental compliance officer on hand to monitor future dredging, the Oregonian report said.



Evergreen, Wan Hai to exchange slots in intra-Asia service

Evergreen Line announced today it has reached an agreement with Wan Hai Lines to exchange slots on Evergreen's NSA/NSB services, as well as Wan Hai's KSS/KVS services, effective Feb. 22, 2009.

The NSA service rotation will be: Osaka - Kobe - Iwakuni - Moji - Hakata - Taipei - Taichung - Kaohsiung - Nansha - Shekou - Hong Kong. The first sailing will be the Uni-Perfect 1183-084S with estimated arrival in Osaka on 2/28/09.

The NSB service will be: Kaohsiung - Taichung - Taipei - Hong
Kong - Pasir Gudang - Tanjung Pelepas - Penang - Port Kelang - Tanjung
Pelepas - Singapore – Manila. The first sailing will be the 'ITAL ONORE 1179-021S with estimated arrival in Kaohsiung on 2/22/09.

The KSS service will be: Penang - Port Klang - Pasir Gudang - Singapore - Hong Kong - Kaohsiung - Keelung - Inchon - Kwangyang - Pusan- Keelung- Kaohsiung- Hong Kong- Singapore- Port Klang-Penang. The first sailing will be the 'WAN HAI 313 S039' estimated arrival in Inchon on 2/27/09

The KVS service rotation will be: Inchon - Kwangyang - Ulsan -Pusan - Keelung -Taichung-Hong Kong-Ho Chi Minh - Kaohsiung -Taichung- Keelung- Inchon .The service sector for slot exchanges is from South Bound: Hong Kong - Ho Chi Minh & North Bound: Ho Chi Minh – Kaohsiung. The first sailing will be the 'WAN HAI 202 S267’ with estimated arrival in Hong Kong on 2/27/09


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