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Summary for June 1 - June 5, 2009:
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Monday, June 1, 2009

Top Story

Credit Managers’ Index signals end to recession

The Credit Managers’ Index for May rose from 44.3 to 45.4, equaling a level not seen since October 2008, and the fourth straight month of growth, according to the National Association of Credit Management.

“Those who have been watching the Credit Managers’ Index have been able to refer to these improvements for three months already, and the May data carries the same theme,” said Chris Kuehl, Ph.D., NACM economist.

The CMI is constructed from a monthly survey of credit and collection professionals. The CMI survey asks NACM members to rate favorable and unfavorable factors in their monthly business cycles. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcies.

When the Index gets above the 50-point level, it is an indicator of expansion as opposed to contraction, according to the NACM.

“The recession essentially came to an end in February and March of 2009. The CMI data, combined with various other measures, suggest that the economy finally reached its lowest point and has been in the recovery stage since,” said Kuehl pointed out that this doesn’t mean the economy will come roaring back in the next few months, but asserted that the second quarter will be the last quarter of negative GDP as the third quarter should show some growth.

The NACM also pointed to other recent indicators of recovery, including: resurging consumer confidence; increase in durable goods orders; first time claims for unemployment are down; and even the housing market showing some movement.

Sales jumped from 37.4 to 41.8 in the CMI, representing one of the biggest increases in the last several months, the NACM said. The CMI is also showing that credit is being extended again.

The states that have seen the highest rates of job loss and bankruptcy—California, Florida, Michigan and Ohio—are seeing the weakest performance in terms of credit, the NACM said.

However, some states seeing severe declines—most notably Arizona and Nevada—have shown some improvement. The sectors that have been struggling the most include automotive and retail.

Medical and energy may be in true recovery, the NACM said. The overall energy sector has been growing, especially in the area of alternative technologies. The entertainment sectors have also been holding steady.

The CMI shows the manufacturing sector continues to improve slowly, moving slightly from 44.4 to 45.3, it’s best position since September 2008.

There is evidence that manufacturing in general is still in the process of a shakeout the NACM said, referring to what tends to be a rapid expansion for those companies that survive a downturn.

The growth in the service sector jumped from 43.5 to 45. This has been spurred by higher sales and a very dramatic expansion of credit, the NACM said. The growth in this sector is especially important in the U.S. economy since the service sector represents close to 80 percent of the nation’s GDP, the NACM said. CMI’s data suggests that only retail remains in a serious slump.

The health care and hospital-related service arena has provided the biggest jumps in growth numbers with a renewed sense of urgency in health care-related industries as the government begins to determine what will likely change in the system.

The NACM said that in looking at year-over-year performance, there is cause for optimism as the economy is beginning to show what it termed the classic “U,” signaling a normal recessionary pattern. Currently, the gains are taking the index back to where it was in October 2008—just after the meltdown started to accelerate. The NACM said if the trend continues at its current pace and in the same direction, the index will be back above 50 by mid- to late summer, reinforcing assessments that real GDP growth could return in the third quarter.

Shipbuilding report: World containership fleet should continue growth curve

The world containership fleet should continue its rapid growth curve at a reduced rate, despite the current overcapacity of tonnage and low shipping rates, according to the Shipbuilding Market Forecast for Container and Ro-Ro Ships released by Lloyd’s Register-Fairplay (LRF) Research.

The report also said “the current picture for containership operators is grim, caused by the severe imbalance in supply and demand under the sluggish economic conditions worldwide.”

With some spot rates as low as $250 to move a container from Hong Kong to Rotterdam compared to $1,400 a year ago, the report said the record one million ide TEUs is not surprising.

The positive news from the LRF Research report forecasts an uptick in 2009 toward “modest levels.”

There has been a rush so far to cancel existing orders at shipyards, the report said. The global containership fleet stands at 4,671 ships with a total capacity of 12.4 million TEUs, with expected growth of 13 percent in 2009 due in large part to already-ordered vessel deliveries. The ship delivery growth rate will slow to 9.3 percent annually, but at a much higher average of 25 percent for 8,000-plus-TEU ships through 2013, the report said.

Vessel removals are only expected to take approximately 904,000 TEUs out of the global fleet over the next five years, the report said.

CSAV could receive up to $710 mil in financing

Chilean container shipping group CSAV, the 16th largest box carrier in the world, announced it reached an agreement with a ship-owners group in Hamburg for financing to help bolster the value of the financially troubled company.

The financing plan includes an eventual program of capital investment by shareholders and the Hamburg ship-owners that could reach up to $710 million.

“It is often said that severe difficulties either kill you or strengthen you. CSAV has experienced difficulties and after this process will no doubt be in the latter case,” said Juan Antonio Alvarez, CSAV’s CEO.

Evergreen, China Shipping cooperate on Asia-America, Europe and Mexico/
U.S. East Coast trades

Evergreen Line and China Shipping Container Lines announced an agreement to cooperate on Asia-US West Coast, Asia-Europe and Asia-Mexico-U.S. East Coast containership services commencing June 2009.

The two lines said they would share slots on the Asia /U.S. Pacific South West Coast route.

Evergreen will upgrade its Hong Kong, Taiwan-U.S. West Coast service (service code: HTW for Evergreen and AAS for CSCL) of five 8,000-TEU vessels. The first vessel will be Ever Champion 0571-027E from Kaohsiung on the 16th of June with the following port rotation: Kaohsiung - Xiamen - Hong Kong - Yantian -Los Angeles -Oakland - Kaohsiung.

China Shipping will upgrade its North/Central China to U.S. West Coast service (service code: CPS for Evergreen and AAC for CSCL) of five 8,000-TEU vessels. The first vessel will be Xin Ou Zhou 0020E from Qingdao on the 16th of June with the following port rotation: Qingdao - Lian Yun Gang - Shanghai - Ningbo - Pusan -Los Angeles -Oakland - Qingdao.

The Asia-Mexico-U.S. East Coast route will be:

Asia Mexico U.S. East Coast service (service code: AUE2 for Evergreen and AAE1 for CSCL) with a total of eight 4,000-TEU vessels. The first vessel will be Ital Laguna 0001-019E from Shanghai on the 15th of June with the following port rotation: Shanghai - Hong Kong - Yantian - Lazaro Cardenas - New York – Norfolk -Savannah - Miami - Lazaro Cardenas - Shanghai.

The Asia-European trade will be:

China North Europe service (service code: CEM for Evergreen and AEX1 for CSCL) with a total of eight 8,000 TEU vessels. The first vessel will be Xin Hong Kong 0029W from Qingdao on the 17th of June with the following port rotation: Qingdao - Shanghai - Ningbo - Felixstowe - Hamburg - Rotterdam - Zeebrugge - Hong Kong - Qingdao.

NCBFAA files comments on ISF

In a letter to Customs and Border Protection (CBP), the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) filed comments on the Interim Final Rule for the Importer Security Filing.

The NCBFFA’s primary issues with ISF included: difficulty in obtaining timely bill of lading information; the need for continued flexibility in interpreting some of the data elements; and the suggestion that future ISF Progress Reports include transactional details, which would allow ISF Filers to address specific issues with the appropriate ISF importers.

Tuesday, June 2, 2009

Top Story

Maryland port and Panama Canal Authority sign MOU

The Maryland Port Administration announced it has reached a memorandum of understanding agreement with the Panama Canal Authority to jointly promote and market the all-water route from Asia to the Port of Baltimore.

Currently, the MPA oversees six public marine terminals and recently launched an effort to explore a possible public-private partnership to operate its Seagirt Marine Terminal and to help fund a 50-foot berth.

The Panama Canal expansion’s to handle larger containerships is projected for completion in 2014.

“This MOU demonstrates our desire to have a close, productive relationship with the Panama Canal Authority as we move closer to 2014,” said MPA Executive Director White. “Ships that now travel to West Coast ports will instead transit to East Coast ports following the expansion. We will want to be ready for that business.”

Mexican trucking association seeks $6 million in damages from U.S. government

A Mexican trade association representing more than 4,500 trucking companies is seeking $6 billion in damages from the U.S. government because of Washington's refusal to allow Mexican trucks to carry cargo over U.S. roads.

The group, Canacar, filed a demand for arbitration under the North American Free Trade Agreement with the U.S. State Department in April, but didn't publicize the move until Monday.


For the full story:

Top exec shakeup at YRC Worldwide

A shakeup of top executives at Overland Park, Kansas-based YRC Worldwide Inc. was announced by the company.

The executives removed from the company include: Keith Lovetro, former president, YRC Regional Transportation; Michael Rapken, former executive vice president and chief information officer; Jim Ritchie, former president of YRC Logistics; and Christina Wise, former vice president and treasurer.

The following new appointments, and those staying in their current roles, will now report directly to Bill Zollars, the chairman, president and CEO of YRC:

Former Sprint executive John Garcia is now executive vice president and chief sales officer; Mike Smid, is president, YRC Inc. and chief operations officer; Tim Wicks is executive vice president and chief financial officer; Sheila Taylor is vice president, finance and investor relations, and will also assume the role of treasurer reporting to Wicks; Greg Reid is executive vice president and chief marketing officer; Mike Naatz, is executive vice president and chief Information and service officer; John Carr assumes the role of president for YRC Logistics; Dan Churay is executive vice president, general counsel and secretary; and Jim Kissinger is executive vice president of human resources.

"Today's announcement is a significant, strategic step as we take advantage of the full power of YRC Worldwide," said Zollars. "A functional organization structure allows us to dedicate an even broader team of seasoned experts to the support of our customers along all lines of our business - clearly a competitive advantage."

Port of Long Beach to hold community grant meetings

The Port of Long Beach announced it would hold information sessions this month for local residents and the public at large to learn more about how funds from $15 million in grants will be allocated in order to minimize the impact of port operations on air quality and greenhouse gases in the neighboring communities due to its massive middle harbor re-development project.

The informational sessions begin at 7 p.m. June 10 at Cesar Chavez Park, 401 Golden Avenue, in downtown Long Beach.  A second hearing is set for 7 p.m. June 17 at Hudson Elementary School, 2335 Hudson St., in West Long Beach, and a third meeting will be held at 7 p.m. June 24 at Memorial Medical Center, 2801 Atlantic Avenue, Long Beach.

The port said the $15 million in grants will be divided equally among three general areas: schools and related sites; healthcare and senior facilities; and greenhouse gases projects

Honeywell lands $700 mil logistics contract with USMC

Honeywell Technology Solutions Inc. announced it has secured a 10-year, $700 million contract with the U.S. Marine Corps for pre-positioning and logistics support services, which ensures Marine Corps ships are stocked and available for deployment to combat zones.

The terms of the agreement include Honeywell’s oversight of three squadrons and 14 ships stocked with supplies to sustain 15,000 Marines in theater operations for 30 days.

From the Blount Island Command in Jacksonville, Fla., HTSI said its employees would provide the management, inventory accountability, service checks, maintenance, repair and upgrades to equipment and supplies placed aboard these ships. In a typical three-year cycle, HTSI said it repairs 11,000 items and tracks 45 million items that represent the equipment and supplies needed for deployment.

Report: NY congressman pushes for freight rail tunnel funds

4th District Congressman Jim Himes is pushing for funds toward a freight rail tunnel under New York Harbor.

Congressman Himes says the NY Cross Harbor Rail Tunnel would remove much of the 18 wheeler truck traffic on lower Fairfield country highways, and place the freight on the rails.

Himes is asking for a billion dollars to begin the project, which he says would eliminate an estimated 1 million vehicle trips from NYC roads annually.

-WSTC/WNLK Local News


China’s manufacturing expands for third month

China’s manufacturing expanded for a third month, driving stocks to the biggest gain since March and adding to evidence that the economy is recovering.

The official Purchasing Manager’s Index was at a seasonally adjusted 53.1 in May after registering 53.5 in April, the Federation of Logistics and Purchasing said today in Beijing in an e-mailed statement. A reading above 50 indicates an expansion.


For the full story:

Major wine logistics firm goes out of business

In a development that has its customers wondering where to turn next to fulfill their direct to consumer orders, New Vine Logistics, the provider of fulfillment and logistics services for winery direct sales, has essentially suspended operations and advised its winery clients over the weekend that it would not be processing any new orders.

According to an email sent to clients by founder Katie Hoertkorn, New Vine will no longer be able to receive and/or process any further orders for shipment from its facility and will be shutting down the ability to submit orders electronically through New Vine Online.

-Wine Business

For the full story:

Port of Longview signs lease agreement for new grain terminal

The Port of Longview, Wash. announced it has entered into a land lease agreement that would bring first export grain terminal built in the U.S. in over two decades.

The grain terminal project is a joint venture under EGT Development, LLC, a partnership between Bunge North America, Inc., ITOCHU and STX Pan Ocean, the port said.  

Estimated capital investment in the facility by EGT is in excess of $200 million, with the port constructing the ship dock at a cost of approximately $6 million.

“EGT is a perfect fit for the Port of Longview,” said Port Executive Director Ken O’Hollaren. “We’re pleased to have attracted a project that will utilize all the port has to offer.”

Construction on the grain facility is expected to commence this summer, the port said.

Wednesday, June 3, 2009

Top Story

NOL to raise nearly $1 billion to repay debt

Singapore's Neptune Orient Lines plans to raise just under $1 billion through a share sale to repay debt and clear the decks for future acquisitions, according to news reports.

NOL’s shares rose 17 percent on the news, the highest for the company in nearly eight months as investors showed strong support from the majority shareholder, Singapore state investor Temasek, which acquired 67.4 percent of the rights as well as purchasing shares not taken up by minority holders.
"NOL's proactive capital raising will strengthen its balance sheet, enhance its financial flexibility and allow it to seize investment opportunities," said Temasek’s managing director Ong Beng Teck.

NOL shares have gained 54 percent this year, providing the global shipping firm with the ability to raise funds in the company's biggest share sale since its initial public offering in 1981, according to a Bloomberg report.

NOL Chief Financial Officer Cedric Foo said the company's gross debt stands at $1.4 billion, with a cash position of $400 million, the Wall Street Journal reported.

CTSA to raise bunker surcharge rises up to 27 percent July 1

The Canada Transpacific Stabilization Agreement announced that its 11 member shipping lines will raise bunker surcharges between 24 percent and 27 percent beginning July 1.

The surcharge will go to $308 per-TEU, $385 per-FEU, $433 per-40-foot, high-cube and $487 per 45-footer for Canadian East Coast ports.

The charge will be $150 per-TEU, $188 per- FEU, $212 per-40-foot, high-cube container and $238 per-45-footer.

CTSA members are APL, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, NYK, OOCL, Yang Ming and Zim.

CMA CGM raises freight rate, adds bunker surcharge for Asia-Europe

French shipping group CMA CGM announced a rate restoration move in the Asia-Europe trade to $300 per-TEU, effective July 1, 2009.

The shipping line said it would also begin, as of July 1, to levy a separate “Bunker Adjustment Factor” from $283 per-TEU to $333 per-TEU.  The company said it has been monitoring bunker prices and has published the BAF level on its website :

The shipping group said it might also decide to implement a “Peak Season Surcharge,” in the same trade as of August 1, 2009

American Realty Trust acquires new Texas freight facility for lease to FedEx Freight

American Realty Capital Trust, Inc. announced it intends to finalize, by June 15, a new 152,640 square-foot freight facility located in the Satsuma Station Industrial Park in the northwest corridor of Houston, Texas. The facility will continue to be net leased to FedEx Freight.

The purchase price, excluding closing costs and fees, is approximately $30.9 million, and is being acquired from PinPoint Commercial, American Realty said.

The primary lease term is fifteen years, which commenced October 16, 2008, and provides for up to two successive five-year extensions, the real estate trust said.

CAT Logistics to instigate “rolling layoffs”

Employees at the three Caterpillar Logistics Services Inc. locations in Lafayette will have their work hours reduced by at least 50 percent through a series of "rolling layoffs" that are planned to begin Aug. 24.

Caterpillar Inc. said the action, designed to bring production levels and costs in line with demand, is being taken in response to the global recession.

- Journal & Courier

For the full story:

Thursday, June 4, 2009

Top Story

Louisiana establishes deep-water port authority for mega-terminal project

Spurred by the efforts of Louisiana State Senator A.G. Crowe (R-Slidell), the state of Louisiana has established the Louisiana International Deep Water Gulf Transfer Terminal Authority - a 12-member board that will work to construct a mega-port complex in 70 feet of water on state-owned property in Plaquemines Parish and oversee its eventual operation.

Senator Crowe authored the legislation and Act 699 of the 2008 Legislative Session was signed into law by Governor Bobby Jindal.

"This is an exciting moment for us," said Senator Crowe. "Not only does it have the possibility of being the single largest economic development project in our history, but it also will allow our state to again become the gateway to North America. I am already getting inquiries from China, Australia, India and other groups interested in investing billions of dollars in Louisiana," he said.

“It is highly probable that whoever steps up as our licensee may end up controlling the single most important shipping channel in the Western hemisphere since the location is at the beginning of a 14,500 inland waterway network reaching 33 states and three Canadian provinces,” added Sen. Crowe.

The Deep Water Terminal project in Plaquemines Parish would provide a cargo facility for larger, deep-draft containerships to transload to smaller cargo vessels.

The Louisiana group said the location for the proposed terminal is deep enough and would not require any additional dredging.

Senator Crowe said the facility could be funded entirely with private investment and would not require any money from the state. He said the goal is to have the terminal completed opening of the enhanced Panama Canal in 2014.

Penske Logistics to lose Big Lots contract

Penske Logistics LLC, a longtme contractor for Big Lots Inc., is packing up this summer at the discount retailer’s headquarters after the merchant opted to not renew a contract that expires in July.

The Reading, Pa.-based company said in a filing with the Ohio Department of Job and Family Services that as many as 53 employees could be affected when its contract with Columbus-based Big Lots expires July 31. Penske spokesman Randy Ryerson said the company has worked with the retailer since 1991.

-Columbus Business Journal

For the full story:

EU wants shipping and airlines to help pay for climate funding

Shipping and airlines could be tapped for money to help poor nations tackle and adapt to climate change, according to draft proposals to be presented to European finance ministers on Tuesday.

Greenhouse gas emissions from the two sectors are expected to be addressed at a United Nations meeting in Copenhagen in December to find a new global deal on fighting climate change.


For the full story:

Cathay Pacific CEO says air cargo business stabilizing

Cathay Pacific Airways' cargo business is stabilizing, but a pickup depends on when demand from major Western economies returns, CEO Tony Tyler said on Thursday.

Hong Kong's dominant carrier reported a 24 percent fall in revenue derived from passenger and cargo in the first quarter.

The International Air Transport Association (IATA) also believes the global slump in demand for air freight may have hit bottom.

IATA said air cargo demand tumbled nearly 22 percent in April, the fifth consecutive month of a drop of more than 20 percent.


For the full story:

APL launches its first direct weekly service between U.S. and Vietnam

Global container shipping leader APL launched its first weekly direct container shipping service between Vietnam and the US Wednesday.

The company held the inaugural ceremony at the brand new Saigon Port-PSA deepwater container terminal located on Ba Ria-Vung Tau Province’s Cai Mep River.

The new service will cut two days off the transit time between Vietnam and the west coast of the US, taking just 15 days to reach Seattle and 16 days to reach Los Angeles.

- Thanhnien News

For the full story:

Friday, June 5, 2009

Top Story

Report: MOL senior officer says spinning off container division an option

Mitsui O.S.K. Lines Ltd., Japan's second-biggest shipping line in terms of sales, said spinning off its container shipping division was one option to turn around the loss-making business.

"That (spinning off) would increase flexibility and speed up decision making, consolidating the business with other firms for instance," Kenichi Yonetani, Mitsui O.S.K. senior managing executive officer, told Reuters in an interview on Thursday.

He said he there would be more benefits in consolidating the business with that of a foreign ally than a Japanese rival such as Nippon Yusen KK or Kawasaki Kisen Kaisha as there would be no overlap of facilities.


For the full story:

Port of Los Angeles approves $1.1 billion fiscal budget

The Port of Los Angeles harbor commission announced its approval on Thursday of a $1.1 billion for the port’s 2009-2010 fiscal year, representing a 1.8-percent decrease over the current fiscal year budget.

The port said its new budget would enable it to advance capital improvement projects, environmental initiatives and security enhancements despite the shipping industry recession.

“Our approved budget reflects the harsh realities of the global economic recession and the financial challenges facing the Port of Los Angeles and our tenants,” said Geraldine Knatz, Ph.D., the port’s executive director. ”With container volumes expected to fall again in the next fiscal year, we are continuing to advance projects that will produce economic and environmental benefits while preparing us for the eventual economic recovery and the return of higher trade volumes.”

Knatz said the port has retained its “AA” bond ratings, and has cut spending by seven percent – at over $20 million – over the current fiscal year.  

The port said its 2009-2010 budget anticipates total receipts of $435 million, with shipping revenues representing the largest share of the seaport’s revenues, projected to be $311 million - a decrease of 12.9 percent from the current fiscal year’s adopted budget as a result of declines in import and export volumes.

The new budget includes a $15.6 million reduction in operating costs down to a projected $260.4 million, including a $2.6 million – 2.5 percent – reduction in employee salaries via attrition a “managed hiring process,” the port said. The budget includes $377 million for capital expenditures, a 22 percent increase over the current fiscal year budget. 

The port said much of its capital funding would be devoted to the “green” expansion of the TraPac terminal at $64.3 million, China Shipping’s facility at $17.5 million and the World Cruise Center at $15.9 million. Security projects are to include a new port police headquarters at $21.9 million, and other transportation projects budgeted at $27.7 million.  The new port budget also includes $105 million for the continuation of previously approved projects to develop the LA. Waterfront, the port said.

The port said its capital improvement program would create approximately 5,900 construction jobs and that the operating budget supports an additional 783 jobs.

The port’s environmental initiatives are budgeted to receive $62.7 million, three-quarters of which will fund the continued implementation of the Clean Truck Program, the port said.  The port said the new budget includes funding for incentives for cargo ship operators to utilize low-sulfur fuel and reduce engine speeds when transiting near the harbor complex, as well as the Technology Advancement Program. 

NCBFAA registers concern over FDA Customs Broker proposal

In a letter to House Committee on Energy and Commerce Chairman Henry Waxman, National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) President Mary Jo Muoio expressed concern with a proposed provision in the Committee's May 26 Discussion Draft of the Food Safety Enhancement Act relating to customs brokers.

The areas of concern include provisions relating to registration, payment of an annual fee and greatly expanded penalty provisions, the NCBFAA said.

“These provisions surfaced only last week, were preceded by no consultation with our industry and, we are told, may go to subcommittee mark-up next week,” she said.

Identifying the significant differences between the role of a customs broker and that of importers in the supply chain, President Muoio said, “The committee’s draft treats customs brokers as if they are importers.”

Muoio said that although there is an existing comprehensive and carefully crafted licensing and regulatory framework that governs all aspects of a customs broker's business: “The committee’s draft ignores this existing regulatory framework and attempts to erect a duplicate regulatory framework that distorts the role of the broker.”

Under the proposal, the NCBFAA said the customs broker, like the importer, is subject to fees and a mandatory registration that the Health and Human Services Secretary can suspend or cancel for an “inaccurate or incomplete statement or submission of information relating to the importation of food, drugs, or devices.”

In addition, the measure would levy a civil penalty to the broker of up to $500,000, the NCBFAA said.

“Lost in this provision is the fact that a customs broker must rely on the commercial documents and other information supplied by his client, the U.S. importer,” Muoio wrote. “And yet the committee’s draft holds the customs broker strictly liable for the importer-supplied information – with truly debilitating fines and consequences if the information turns out to be inaccurate in any respect.”

“This is a serious flaw in the committee’s draft that must be addressed,” she concluded. “The regulation of customs brokers needs to be in line with the realities of their role in international trade and, specifically, individual import transactions.”

Famous Footwear completes 350,000 sq. ft. DC at Tejon Ranch, Calif.

The Brown Shoe Company announced the completion of its 350,000-square foot Famous Footwear distribution center at the 1,440-acre Tejon Ranch Industrial Complex in Kern County, Calif.

The new DC’s location is approximately 90 minutes north of the Los Angeles ports and four hours south of Oakland. The shoe company said it has good access to the state’s two major port complexes and the ability to serve consumers from San Francisco to San Diego and east to Las Vegas in a one-day truck turn. Brown Shoe said the site also enables round-the-clock, efficient outbound, roundtrip delivery service to 96 percent of California’s population and parts of Nevada -- all within the current Federal driver hours of service limitations.

“The new Famous Footwear DC has an annual capacity of 32 million pairs of shoes and
expected inventory turns 17-22 times per year, which means our stores and web sites will offer shoppers important seasonal footwear trends earlier in the season, and freshen assortments more frequently,” said Brown Shoe Chairman and Chief Executive Officer Ron Fromm.

The initial shipping area includes all of the Famous Footwear stores located west of the Rocky Mountains – approximately one-third of the 1,100-store chain’s locations – and will expand later this month to include direct shipping to customers in that geographic area who place orders on, the company said.

Brown Shoe said it has partnered with the supply chain strategy; design and implementation firm Fortna, Inc. “to integrate best practices for high velocity retail distribution with best of breed equipment and system technologies.”

New technologies and systems include a cross belt unit sortation system, multiple sliding shoe sorters, a high-density storage and picking module, new warehouse management software and the Fortna warehouse control system - FortnaWCS. Fortna’s integrated delivery model included program and project management, site management, design engineering, controls engineering, software engineering, procurement, process design, testing, training and start up assistance, the company said.

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