Cargo Business Newswire Archives
Summary for October 4 - October 8, 2010:
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Monday, October 4, 2010

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Smaller shoe boxes, more container space

Portland, Ore. - In an economy on a slow mend, footwear shippers are being presented with more options that encourage efficiencies in their respective global supply chains, attendees heard today at the Footwear Traffic Distribution and Customs conference.

Cost savings can start with shoe boxes, where the H.H. Brown Shoe Company in partnership with PACCESS Packaging presented a case study on shrinking that footprint.

By reducing the size of some of their shoe box lines, Brown Shoe’s Jason Reed said his company can cut shipping costs by 11 to 17 percent, and utilize 20 percent fewer shipping containers.

Reed said the smaller box approach is more applicable when a shoe line is of a decent size.

”If we’re going to make 110,000 pairs [of a shoe style], then this box size can make sense.”

Poor box design can also cause more unutilized space, increasing logistics costs, according to another case study presented by David Milton of Collective Brands, a division of Payless ShoeSource, and Cathy Yang of Tunyga Logistics.

For example, utilizing more rectangular boxes over the square variety can increase loading direction options in a container, Yang said.

Even the way labeling is handled on product packaging can save headaches and un-necessary costs, according to Sonny Zayas of Avery Labeling.

“It’s not the labeling, it’s the data,” he said “Mis-labeling is the number one compliance infraction,” Zayas said.

On your packaging labels, have more purchase order line detail, correctly identify product, brand and other pertinent data to optimize distribution center and retail level retrieval where up to almost $3 per carton can be saved, he said.

Canada to waive import tax on cargo vessels

Canadian Finance Minister Jim Flaherty said today his government will waive a 25 percent tax on imported cargo vessels, which will save ship owners C$25 million ($24.5 million) a year for 10 years.

The finance minister, who was speaking by the Welland Canal that links Lake Ontario and Lake Erie, said the measure will apply to general cargo vessels, tankers, and larger ferries.

The measure applies retroactively, according to a statement issued on the Finance Ministry’s website. Earlier today, B.C. Ferries announced that it would use part of the C$119.4 million in tariff rebates it will receive to reduce fares by 2 percent.


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No shipping emissions consensus at IMO meeting

The International Maritime Organization (IMO) failed to reach agreement on proposals to cut carbon emissions from new ships, delegates said on Friday, adding that further talks would be held in March.

The shipping sector accounts for nearly 3 percent of global carbon dioxide emissions.

Shipping is not covered by the U.N.'s Kyoto Protocol and a new global climate treaty is still under debate, meaning the industry does not currently have any mandatory emissions laws.

As this week's IMO marine environment protection committee meeting drew to a close on Friday, delegates said there was little consensus on proposals for technical and operational measures aimed at reducing greenhouse gas emissions from ships.

The committee will hold another meeting from March 28 to April 1 next year to discuss a market-based mechanism for lowering emissions.


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SeaFreight awarded 10-year terminal least at Port Everglades

SeafFreight Agencies will occupy a new 25-acre cargo terminal at Port Everglades.

The Broward County Commission has awarded a 10-year lease to the Miami-based shipping company. At first, the contract represents a minimum of $2.4 million in annual payments to the port, but that will evolve to $4.2 million a year, the port said in a news release.

Using other companies’ terminals, SeaFreight has operated at the port for 18 years, the news release said. The new terminal will be located on a 25-acre portion of a new cargo yard at the southern end of the port that has been under construction since April 2009.

SeaFreight currently operates eight container ships at Port Everglades, with twice weekly sailings to and from the Caribbean, the news release said.

Port Everglades spokeswoman Ellen Kennedy said the terminal is expected to open sometime in the first half of next year.

- South Florida Business Journal

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Port of Houston ship channel closed from leaning tower

The Port of Houston will remain closed until at least Tuesday evening, a U.S. Coast Guard spokesman said, a day after a tow vessel pushing three barges rammed a high voltage tower and left it leaning precariously over the ship channel.

Workers have brought in a crane known as "Big John," which they plan to use to get the steel tower out of the way, said Coast Guard spokesman Capt. Marcus Woodring,

The accident happened early Sunday morning at the narrowest point of the ship channel, just north of the Exxon Baytown terminal, which, Woodring said, is the only one of five terminals still open.

Meanwhile, at least 30 ships were unable to move -- 18 inbound and 12 outbound. About 19 of the Houston Ship Channel's 25 miles are blocked.

Woodring said the tower was undergoing maintenance at the time of the accident, and no electricity was flowing through the lines. He added that the cause of the accident is under investigation.


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Tuesday, October 5, 2010

Top Story

Chassis jurisdiction moves to the front burner

Portland, Ore. - There is no single container chassis-ownership model on the near-term horizon, however, who has jurisdiction over the maintenance of that equipment will be another hot topic in the coming months and years, attendees heard here at the second day of the Footwear Traffic Distribution and Customs conference.

Already, eight major container-shipping lines have announced various chassis-provision phase-outs from their business offerings - a decades old component to their operations.

Stephanie Kang of the Port of Seattle said one of the emerging groups of chassis providers are third parties, with TRAC and Flexi-van leading the pack at the moment.

While who will provide chassis for container shippers shakes out, a panel of West Coast port representatives raised the issue of chassis repair and inspection.

"The labor component of this is a huge issue," said Sam Ruda, the marine director of the Port of Portland.

In the evolving chassis model, more of that equipment will be migrating to near-dock container yards, potentially taking them out from under the jurisdiction of the waterfront unions and possibly lowering costs as a result.

"The ILWU bases return on investment on issues like these, and we're just at the front end of this now," Ruda said.

All three ports represented, including the Port of Los Angeles, acknowledged that moving chassis to off-dock locales could potentially mean more space, throughput and lower costs, although Kang said some truckers have said the off-dock model could require an extra move.

Port of Portland's Ruda compared the chassis issue to what is happening in the airline industry with fee-based services like paying for checked baggage, which has brought in "significant revenue" for them, he said.

How the various chassis issues will play out was not a question the panelists answered directly, but according to Ruda, the industry could be in for a wild ride: "Fasten your seatbelts," he said.


Wednesday, October 6, 2010

Top Story

Oil hits five-month high

Oil rose to a five-month high before a government report today that may show U.S. fuel supplies are dropping faster than forecast, while a weaker dollar reduced the appeal of commodities.

Futures climbed as equities opened higher in Europe.

An Energy Department report today may show U.S. gasoline stockpiles slipped 250,000 barrels last week, according to a Bloomberg News survey.

The industry-funded American Petroleum Institute said yesterday inventories of the motor fuel dropped 4.06 million barrels, the biggest weekly decline since May 2009.

Crude for November delivery climbed as much as 51 cents, or 0.6 percent, to $83.33 a barrel in electronic trading on the New York Mercantile Exchange. That is the highest price since May 4.

U.S. crude stockpiles climbed by 4.44 million barrels last week, the biggest gain in five weeks, the American Petroleum Institute said.

Today's Energy Department report may show inventories rose by 413,000 barrels, based on the survey.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

The dollar was at $1.3857 to the 16-nation euro after declining 1.1 percent to $1.3839 yesterday. A weaker U.S. currency bolsters the appeal of commodities as an alternative investment.

Crude prices may rise to between $85 and $95 a barrel by the end of this year as stockpiles decline in the U.S., the world's biggest oil-consuming nation, according to Goldman Sachs Group Inc.


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Delta aims for $2 bil boost from repair and cargo

Delta Air Lines Inc. is taking on more maintenance work for other carriers in-house and working to expand its cargo business in a bid to boost revenue from those services to $2 billion within three years.

The world's second-largest airline plans to reach $1 billion in revenue from aircraft repairs, almost doubling 2009's total, and the same amount in cargo sales, a 27 percent increase, two executives said in interviews.

Delta is taking advantage of the broader network created by its 2008 purchase of Northwest Airlines Corp., which allowed it to charge more for cargo.

The deal also gave Delta expertise in working on Airbus SAS jets, not just Boeing Co. planes, to help it expand in its maintenance business as U.S. rivals pull back.

Freight revenue will be $850 million to $875 million this year, said Neel Shah, the vice president in charge of Delta Cargo, who outlined the $1 billion revenue target. Anderson and President Ed Bastian view cargo as a pillar of their efforts to end two straight annual losses, Shah said.


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Bellingham port commission chooses former Seattle seaport director

In a unanimous vote, Port of Bellingham commissioners have named Port of Seattle executive Charlie Sheldon as the Port of Bellingham's new executive director.

The three commissioners announced Sheldon's selection Tuesday, Oct. 5. Their vote came after two days of deliberations with port staffers, business people and other community members in the wake of a Sunday reception for the three finalists for the job.

Sheldon, 63, has held a number of roles at the Port of Seattle and is now in charge of special projects. Commissioners cited his experience with Sea-Tac airport and marine shipping.

The salary range for the position has been announced at $125,000 to $135,000. The specific amount will be negotiated with Sheldon, commissioners said.

The port's executive director oversees a staff of about 90 people in managing a countywide public port district that operates Bellingham International Airport, Fairhaven Transportation Station and the Bellingham Cruise Terminal. The port also serves about 2,000 moorage customers at marinas in Blaine and at Bellingham's Squalicum Harbor. More than 250 businesses operate on properties leased from the port.

Sheldon has been with the Port of Seattle since 1990. He served as managing director of the seaport division for seven years. He also played a major role in the Sea-Tac third runway project while he was director of the capital improvement program in the aviation division. He holds a bachelor's degree from Yale University and a master's of science from the University of Massachusetts.

Sheldon nosed out two other finalists: Mark Beaty, executive director of operations for the U.S. Customs and Border Protection Office of Air & Marine Headquarters in Washington, D.C., and Gregory Borossay, general manager of liner development at the Port of Portland in Oregon.

-Bellingham Herald

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Nine NY-NJ longshoremen charged with drug trafficking, fraud

Federal prosecutors are charging nine longshoremen from the Port of New York and New Jersey, and thirteen others, with trafficking drugs and defrauding investors.

Tuesday at the Manhattan headquarters for the United States Attorney Southern District, US attorney Prett Bharara said cocaine was being loaded onto container ships in Panama by a drug trafficking ring there and offloaded by longshoremen at the port.

Bharara alleges the longshoremen were paid between $50,000 and $100,000 per duffel bag that was offloaded from the container. A longshoremen could potentially make as much for offloading a single duffel bag as he might earn in an entire year.

Drug trafficking charges were brought against eight longshoremen and two others and 1.3 metric tons of cocaine destined for New York City and beyond was intercepted.

In addition, one longshoremen and ten others were charged in a scheme to defraud investors. Federal prosecutors allege the charges stem from a classic pump and dump scheme with modern twist. The defendants used social networking sites like Facebook and Twitter to spread false information about thinly traded stocks to pump up the price. Then, when the misinformation campaign was complete, they dumped those stocks for a pretty profit and left innocent investors holding the bag, said Mr. Bharara.

It is estimated the defendants earned $4 million from the scheme and defrauded investors of $7 million. Investigators discovered the alleged fraudulent trading while conducting the drug trafficking probe at the port.

-WNYC News

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Thursday, October 7, 2010

Top Story

Class-action lawsuit against CSX, NS underway

A key ruling on class-action status could come by the end of the year in a closely watched lawsuit against the top U.S. freight railroads for allegedly colluding to inflate fuel surcharges by billions of dollars.

Two days of oral arguments on the bid for class-action status began Wednesday and are slated to continue Thursday before Judge Paul Friedman in the U.S. District Court for the District of Columbia.

The top four U.S. freight railroads--Union Pacific Corp. (UNP), CSX Corp. (CSX), Norfolk Southern Corp. (NSC) and Burlington Northern Santa Fe Corp.--are defendants in the case. The railroads, which have been unsuccessful in efforts to get the case dismissed, have vehemently denied the allegations.

Attorneys for the railroads will present their arguments Thursday opposing class-action status for the lawsuit, in the wake of arguments Wednesday by Stephen Neuwirth, an attorney for the plaintiffs, in favor of it.

Seven small shippers have been named as plaintiffs in the suit. If the case is certified as a class action, however, any shipper during the period of the allegations--ranging from mid 2003 through 2008--would be a member of the class and potentially eligible for damages.

Neuwirth's firm, Quinn Emanuel Urquhart & Sullivan, has been appointed one of two co-lead counsels for the shippers.


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China to reportedly import millions of tons of corn and grain next year

The U.S. Grains Council on Tuesday said China would likely import 2 million tonnes of corn and 2.5 million to 3 million tonnes of distillers' dried grains (DDGs) in calendar year 2011.

Tom Dorr, president and chief executive of the council, said also said China's demand for corn may grow to a point where the country imports as much as 15 million tonnes of corn on an annual basis by 2015.


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Corporate profits in Q2 helped spur drop in industrial real estate vacancies

North America’s industrial real estate leasing activity is up, although the sector is still vulnerable to mixed economic indicators, which could make sustained recovery slow or sporadic, according to a new report issued by industrial real estate firm Jones Lang LaSalle.
While labor market pressures and slow job growth continue to drag on the economy and hurt consumer spending, the report says there have been positive indicators to offset some of the decline.

Gradually improving corporate profits have renewed long-term optimism, which in turn has spurred a significant amount of second-quarter industrial leasing activity, the report said.

For the first time in almost two years, national average vacancy rates in North American industrial real estate have dropped 20 basis points, from 10.6 percent in the first quarter to 10.4 percent in the second quarter, the global real estate services firm reported last month.

"With the rise in corporate America's second quarter profits and a need to restock inventories that were running at 50-year lows, a number of large occupiers have strategically captured high quality logistics space at cyclically low rates," said Craig Meyer, managing director and leader of Jones Lang LaSalle's logistics and industrial services group, said in a statement.

"Opportunities remain in virtually every market at aggressive terms and even with the very modest levels of leasing and little or no speculative construction, choices are quickly becoming limited in some markets, especially in the Class A large block sector.

"In fact there is only 11.3 million square feet of new construction in the pipeline and 83 percent of that is pre-leased. With such low levels of new construction planned in the foreseeable future, we expect to see an increase in build-to-suit activity," Meyer said.

The industrial real estate sector is still vulnerable.

"While we can report some overall positive news for the sector, we are still very much at the mercy of this precarious economy," Meyer said.

"Declining consumer confidence, the fading impact of the federal stimulus support and worldwide economic volatility are forcing many industrial landlords, tenants and investors to look back over their shoulders in fear of a double dip recession."

According to the report, which tracks 38 key industrial markets in the United States, average net absorption is at 11.1 million square feet for the quarter. So far this year, however, average net absorption remains negative at 7.4 million square feet, down significantly from last year's total of 126.6 million square feet., the report said.

Demand for high-end, prime logistics space tops the general market and has given a boost to Midwest regions like Memphis, Dallas/Fort Worth and Columbus, as well as key distributions markets in the Northeast such as Central New Jersey, Philadelphia and Harrisburg, according to the report.

However, competition for tenants is fierce in almost every market, and the rising level of concession packages — including periods of free rent and tenant improvement packages — continue to be a critical component when completing deals, the report said.

Nine stowaways detained at Port of Montreal

Nine people have been detained after they were intercepted on a ship arriving from Morocco in the Port of Montreal, border services officials say.

Officials say the foreign nationals, who were not carrying passports or any other identifying papers, are in good health.

The nine people arrived in Montreal at about 2 a.m. on a ship travelling from Casablanca, Morocco.

Border services spokesperson Jacqueline Roby told The Canadian Press the nine have been detained under the immigration and refugee protection act.

-CTV News

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Hero pilot of UA Flight 811 dies

David Cronin, the hero pilot who landed a crippled United Airlines Boeing 747 in Honolulu 21 years ago, died Monday at his home in Minden, Nev. He was 81.

Cronin was the captain on United Flight 811, which left Honolulu for Auckland, New Zealand, on Feb. 24, 1989. The 747 was 23,000 feet over the Pacific 85 miles south of Oahu when a forward cargo door blew out, creating a gaping hole in the right side of the aircraft.

The explosion knocked out two of the plane's four engines. Nine passengers seated in business class died when their seats were sucked out of the plane.

Despite the damage, Cronin and his crew were able to make an emergency landing at Honolulu Airport about 22 minutes later. There were 336 passengers and 18 crew members on board.

-Honolulu Star-Advertiser

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