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Today's Cargo News Archives
Summary for April 9 - April 13, 2007:

J.B. Hunt among Fortune’s most admired

J.B. HUNT Transport Services Inc. (NASDAQ: JBHT) Apr 3 announced it has once again been named to the Fortune List of America’s Most Admired Companies.

For the third consecutive year, J.B. Hunt has made the prestigious list described by Fortune as “the definitive report card on corporate reputations.”

J.B. Hunt is the highest-ranked provider of full-service intermodal, dedicated, and truckload services and fourth overall among the 10 firms within its respective industry category.

In March, J.B. Hunt announced it would partner with Matson Navigation Co Inc. and Matson Integrated Logistics in new guaranteed services from Ningbo and Shanghai to Long Beach and various US inland destinations under a single invoice.

The guarantee will offer customers a percentage refund for shipments not meeting the stated transit time/arrival date.

The firms said the new service will provide their customers the opportunity to gain economies of scale on inland transportation costs by reducing the number of container/trailers that are moved to the final destination/inland point.

Matson’s parent firm, Alexander & Baldwin (NYSE: ALEX), also was named to the Fortune List of America’s Most Admired Companies, ranking sixth in the Transportation and Logistics sector.

Target Logistic Services selects ICE as new partner

TARGET Logistic Services (AMEX:TLG), an international freight forwarder and logistics provider, announced Mar 30 it is strengthening its operations in Australia with the selection of a new partner, International Cargo Express (ICE), headquartered in Sydney.

ICE has been serving logistics needs for air and ocean shippers since 1988. ICE is ISO-certified and offers air & ocean freight forwarding, in-house customs clearance, inventory control, project cargo services, and local transport consultation and management.

Chris Coppersmith, President & CEO of Target Logistic Services, said ICE has proven to be one of the most significant cargo organizations in Australia, one of the most important markets for US goods and services.

Coppersmith said ICE s being linked to Target's worldwide EDI system for instant tracking and tracing.

ICE founder Peter Timmerman praised Target, saying there are many logistics providers serving US-Australian trade, but few have the experience, skill, and dedication in serving the needs of the customer as Target.”

This Bud’s for yuan

ANHEUSER-BUSCH (NYSE: BUD) said it will build a brewery in Foshan, China, to help reach its goal of doubling the distribution of its Budweiser beer in China over the next five years and making the brand available to millions more potential beer drinkers.

The St. Louis brewer said it will make Budweiser available in 100 new cities, each with a population of at least 3mn people.

The company also said it will introduce domestic brew Harbin to 33 new markets in 2007.

In 2006, China’s beer market grew nearly 15%, the third consecutive year of double-digit volume growth. Additionally, Mexico’s Grupo Modelo named Anheuser-Busch the importer of Corona Extra and its other brands in China.

Scheduled for completion in late 2008, the Foshan brewery will be built on a 249,000 sq m site and cost $63mn. The facility will have a production capacity of 2.6mn hectoliters with potential for expansion.

Anheuser Busch is the leading American brewer, holding a 48.4% share of US beer sales. The company brews the world’s largest-selling beers, Budweiser and Bud Light. Anheuser Busch also owns a 50% share in Grupo Modelo, Mexico’s leading brewer, and a 27% share in China brewer Tsingtao.

UP to double capacity at POLA facility

Union Pacific Railroad (NYSE: UNP) has submitted a $300mn proposal to upgrade and improve the environmental conditions at its Intermodal Container Transfer Facility near West Long Beach.

UP Chairman Jim Young said the project goal is to improve the environmental impact of the facility, while supporting growth at the Ports of Los Angeles and Long Beach.

The near-dock freight yard annually handles some 700,000 containers that are trucked to the site and then loaded onto trains heading east.

Under its proposal, UP would double the facility’s container-handling capacity while replacing nearly all of the yard’s diesel trucks and gantry cranes with electric-powered equipment.

The proposed upgrades would allow UP to reduce pollution from light, noise, and diesel emissions by investing in new yard equipment, locomotives, and trucks.

The plan calls for using special electric cranes to stack containers as well as hoods to shade light away from area homes.

The 24/7 operation also would add truck gates and other efficiencies to reduce truck wait times by 50%, UP officials said.

Approval of the proposed upgrades is required from the Port of Los Angeles Harbor Commission.

Boston’s CCT sees increased throughput

Boston Port’s Conley Container Terminal, pushed by greater volumes from the Far East, saw its throughput increased by 7.3% in 2006 to 200,113 total TEUs, with total tonnage at 1,555,313 tonnes, the Massachusetts Port Authority (Massport) said.

Mike Leone, port director for the Massachusetts Port Authority, underlined the growth, saying that Boston is an attractive port for steamship lines because of the strength of the New England market and the commitment of the area’s trade community.

“Looking ahead,” Leone said, “Massport is striving to attract a new service via the Suez Canal that will connect Boston with Southeast Asia, the Indian subcontinent, and the Middle East.”

China Ocean Shipping Company (COSCO) and its partners “K” Line, Yang Ming Line, and Hanjin — which run Massport’s five-year-old Asian service between Boston and China — led the port’s surge in container growth with a 13% increase in volume to 73,0761 TEUs over 64,685 TEUs in 2005.

Massport noted that containerized inbound cargo increased by 8% from 2005, totaling 92,949 TEUs, while containerized export cargo was up 7%, totaling 66,041 TEUs.

It said vessel productivity increased by 4% from 2005, achieving an average of 26 container moves per crane per hour.

Shenzen pressures Hong Kong with concessions

Shenzhen will offer a one-off concession of as much as 5mn yuan to international shipping lines and freight forwarders that increase their presence in the city, increasing the pressure on rival Hong Kong's harbor operations.

Zheng Tianxiang, an infrastructure studies professor at Sun Yat-Sen University, described the policy as very aggressive and said it will deprive Hong Kong of cargo growth over the long term.

Shenzen deputy mayor Zhang Siping announced the incentive plan over the holiday weekend, saying it is a move made to ensure the city can fill the three new berths that will increase capacity 15%.

Under terms of the subsidy program, shipping lines would receive 5mn yuan for every international route added and 1.5mn yuan for new domestic coastal routes, according to the Nanfang Daily news.

Qualified international shipping lines will receive as much as 4mn yuan for moving their headquarters or operation centers to Shenzhen.

Up to 3mn in subsidies can be claimed by freight forwarders opening their headquarters in the city or multinationals setting up a distribution center there.

The paper also said barge service providers were being offered 75,000 yuan per new service calling at Shenzhen.

China’s maritime industry booms

China's seas generated 2.09 trillion yuan ($270bn), or just over 10% of gross domestic product (GDP) last year, according to a report on the country's marine economy in 2006.

The report, issued by the State Oceanic Administration (SOA), said last year's output value of marine industries – including fishing, transport, oil and gas exploitation, tourism and shipbuilding – rose 13.97% year on year.

The SOA said development of a regional economy along the Chinese coastline was the main pillar supporting the rapid growth of the country’s marine economy.

The gross production by the Yangtze River Delta Region and Bohai Bay Rim Area each grew more than 650bn yuan, with the regions' combined output values accounting for about two-thirds of the national total.

He Guangshun, deputy director of the National Ocean Information Center, said that the marine economy was currently above the world average.

There has been a strengthening of the capability of China's harbors, and the country now has half of the world's top 20 international facilities.

The SOA report said China’s marine industry employed 29.6mn people in 2006, 1.8mn more than in 2005.

Shanghai Port sees record earnings

Shanghai International Port (Group), which runs the mainland's busiest container port, posted an 18% gain in profit during 2006 and said earnings will rise more in 2007.

In a statement to the Shanghai stock exchange, the Group said net income increased to 2.96bn yuan from 2.5bn yuan in 2005, with revenue climbing by 13% to 12.48bn yuan.

Shanghai Port's cargo volume rose 21% as the country's increasing foreign trade boosted demand for sea transport.

The city may surpass Hong Kong as the world's second-busiest container port in 2007, after phase two of a $16bn new harbor began operations in December.

Nancy Wang, an analyst at KGI Asia, said Shanghai Port is expected to maximize profit in 1H 2007 and stabilize its growth in the coming years.

Wang said the port's capacity, the largest in China, will help it gain from scale of operations.

Ningbo may revive stock deal

Ningbo Port Group, operator of mainland China’s fifth-largest port, may revive a plan for an initial public offering in a deal that could raise up to $500mn.

Ningbo Port had planned to sell shares in Hong Kong in 2005 but that deal fell apart when the company and bookrunners could not agree on a valuation.

So far, no decision has been made as to whether Ningbo Port would apply to sell shares in Hong Kong or Shanghai.

In January, Ningbo Port raised 500mn yuan by selling one-year short-term bills in the interbank market. The money would be used as working capital, the company said.

However, the port operator could find itself competing with some of its mainland rivals for investor funds.

Guangzhou Port Group, an operator at China's third-largest cargo port, planned to raise up to $750mn from share sales in the fourth quarter.

Qingdao Port Group may also be planning a share offering of up to $500mn later this year.

In fact, UBS analyst Ingrid Wei expects double-digit earnings growth and stronger return on equity despite the slower growth at a number of mainland ports.

Puget Sound Maritime Air Emissions Inventory released

Maritime activities accounted for 29% of all diesel emissions in the Puget Sound region in 2005, according to a new study issued Apr 10.

The Puget Sound Maritime Air Emissions Inventory identifies and quantifies the kind and sources of air pollution released from maritime-related diesel equipment operating within the greater Puget Sound region, according to the Puget Sound Maritime Air Forum.

“The inventory is not a policy document and does not include policy recommendations,” according to the study.

“There’s a lot of good information here, and it will help us reduce the impact of ports and make room for the economic growth that comes with the port growth,” said Dave Kircher, air resources program manager for the Puget Sound Clean Air Agency.

Data was gathered for ocean-going vessels (cargo, cruiseships, tankers); harbor vessels (tugs, ferries, recreational vessels, etc.); cargo handling equipment (cranes, straddle carriers, forklifts, etc.); trucks and buses; on-terminal fleet vehicles (passenger cars and trucks); and rail operations.

Military operations and equipment were not included due to security considerations.

Matson Navigation Marks 125th Anniversary

Matson Navigation Co. Apr 10 celebrated 125 years of Pacific shipping. The company was launched on Apr 10, 1882, when Captain William Matson sailed his three-masted schooner, Emma Claudina, from San Francisco Bay to Hilo, Hawaii, carrying 300 tonnes of food, plantation supplies, and general merchandise.

Throughout its history, Matson has served Hawaii continuously and today remains the state’s leading ocean carrier, serving all of the major ports of the Islands. In addition to Hawaii, Matson serves Guam and Micronesia and has a weekly service from Ningbo and Shanghai to Long Beach. Its subsidiary, Matson Integrated Logistics, is recognized as one of the top 10 logistics companies in the US.

“Celebrating 125 years of service is a remarkable achievement for any company and is truly unique in the US maritime industry,” said James Andrasick, president and CEO.

Matson plans to celebrate its anniversary in a number of ways throughout the year, including special events with employees and customers. The company will be featured in several leading transportation publications and will introduce a special 125th anniversary online timeline on its website next month.

Rayonier names MOL “Carrier of the Year”

Rayonier, the fifth-largest private timberland owner in the US, Apr 11 named MOL Global Liner Services as their “Carrier of the Year.” Rayonier is a global forest products company that supplies timber, high value specialty cellulose fibers, and wood products to customers in more than 50 countries worldwide.

The Carrier of the Year award recognizes MOL as the partner who was instrumental in helping Rayonier attain its business objectives by increasing the efficiency of its transportation supply chain.

“Rayonier strives for continuous improvement from itself and its service providers,” said Terry Bunch, director, logistics and customer service. “We use our performance measurement process to ensure we are working with carriers that deliver a high quality of service. We are proud of our association with MOL and are appreciative of the quality of service they provide to our organization.”

“We are very pleased that our efforts on behalf of Rayonier have been recognized with this distinguished award,” said Paul McClintock, RVP/GM, Southeast Gulf Region (Atlanta), MOL (America) Inc. “This is a relationship industry, and customer success is what drives us,” added McClintock.

Canadian rail strike still on

A tentative contract agreement between the Canadian National Railway Co. (CN) and United Transportation Union (UTU) workers was rejected Apr 11 by almost 80% of union voters, according to UTU.

Pickets were deployed at several CN sites, including at Vancouver, Canada’s largest port, immediately after the results were announced. About 2,800 conductors and yard workers began a rotating strike.

Even though UTU members in Canada have been on strike at CN since Feb 10, 2007, they had suspended their strike action and returned to work during the ratification process for the tentative settlement.

Management personnel will perform the duties of striking workers, according to E. Hunter Harrison, CN president and CEO, who said, “CN is a scheduled railroad and we must ensure the continuity of our operations.”

Both CN and UTU said they are prepared to resume negotiations, but no date for talks has yet been scheduled.

UPS, SAA sign for Chinese air hub

UPS (NYSE: UPS), the world’s largest package delivery company, and the Shanghai Airport Authority Apr 12 conducted a formal signing ceremony in another step toward construction of the UPS International Air Hub at Pudong International Airport in Shanghai.

The UPS International Air Hub, scheduled to open in 2008, will be the first constructed by a US carrier and will link all of China via Shanghai to UPS’s international network, with direct service to the Americas, Europe, and Asia.

UPS expanded its air operations in China throughout 2006 and now flies to more points in China than any other US airline, freight or passenger, according to UPS.

Over the past five years, UPS has invested approximately $600mn in China, including its successful transition to become the first wholly owned foreign express carrier in China.

The new hub will be built on land totaling almost 96,000 sq m. It will operate 24 hours a day, seven days a week.

Presiding over the ceremony were US Transportation Secretary Mary Peters and Vice Mayor of Shanghai Yang Xiong.

DHL delivers new one-day service

Global express delivery and logistics company DHL Apr 10 announced it has reduced delivery times from major European cities to the US.

It said US importers and European exporters can take advantage of one-day delivery to the US from six European countries.

With the air network enhancements, customers can receive DHL’s international next-day service from key European population centers to all major metropolitan areas across the US.

“This network enhancement will ensure customers are provided with the most competitive express service offering to and from the largest markets in Europe,” said Lindsay Birley, DHL’s executive vice president of International Services.

Markets receiving the upgraded service to the US in the United Kingdom include Birmingham, Bradford, Leeds, Leicester, London, Manchester, and Newcastle.

In Italy, it includes Bergamo, Brescia, Bologna, Genoa, Milan, Rome, Turin, and Verona, while in Germany adds Cologne, Dusseldorf, and Frankfort). The new service also includes Paris, Amsterdam, and Mechelen in Belgium.

Plans are in place to extend next-day service from additional European countries as DHL enhances its EU-USA network.