Summary for October 27 - October 31, 2008:
Monday, October 27, 2008IHS Global Insight sees deep recessionNariman Behravesh, chief economist at IHS Global Insight, says the U.S. and global economies will struggle through a deep recession that will lead to a modest recovery in 2010 and “a more robust recovery in 2011.” Behravesh made his revised forecast as IHS Global Insight Oct. 24 announced that it has established a Center for Econometric Forecasting, Modeling, and Computation Excellence to ensure that IHS Global Insight “maintains its innovative lead in the field.” “Yes, the recession will be deep, but the recovery is also likely to be strong,” Behravesh said, citing some positive factors: falling food and fuel prices; swift and coordinated responses from governments to the crisis and any aftershocks; and massive amounts of liquidity pumped into the system already by central banks — with more to come — and further fiscal stimulus. The new in-house center will be headed by a managing director and will be a stand-alone resource for the firm’s economists and analysts, as well as clients, IHS Global Insight said. “We are making a renewed commitment to modeling, the groundbreaking initiative that launched this firm nearly 50 years ago…,” said Scott Key, president and CEO. Website: IHS Global Insight
Gulfport expansion plan adoptedMississippi State Port Authority commissioners Oct. 24 unanimously approved a billion-dollar expansion project for the Port of Gulfport that would make it one of the largest container ports in the nation. The port authority said that the project would create about 6,000 jobs, with the potential for thousand more. Mississippi Gov. Haley Barbour said, “It will employ thousands and thousands of people. And I believe the plan that the Port Authority has adopted and the resources that have been made available give us the possibility, indeed the probability, to make that a reality.” The existing port would expand from 210 acres to nearly 1,000 acres, mainly south of its present location. The project calls for dredging and a deepening and widening of the channel and the strengthening and elevation of the pier from 10 feet to 25 feet above sea level to protect the port from strong hurricanes. The project also envisions a commercial-tourism center with a beachside promenade, shops, and restaurants. Port commissioners also announced a new lease agreement with Chiquita that will keep the produce giant at the port through 2019. Website: Port of Gulfport
Cummins names year’s “Diverse Suppliers”Cummins Inc. has named five companies as its “Diverse Suppliers of the Year.” Tim Solso, Cummins chairman and CEO, said Cummins is poised for rapid growth over the next five years, entering new markets and developing new products. “That means a lot of opportunities for our supply base,” said Solso, who earlier this year doubled Cummins’ goal to $1 billion in spending with minority-owned businesses by 2012. “We are very serious about what we are doing.” The suppliers were chosen for their high quality goods and services, dedication to efficiency and cost cutting, and commitment to public service, according to a news release Oct. 22. The winning companies are Turbocam International of Barrington, N.H.; Columbus, Ind.-based LHP Software LLC; Beachwood, Ohio-based MCM Industries Inc.; Telamon Corporation of Carmel, Ind.; and Columbus Components Group of Columbus, Ind. Cummins said it embraces supplier diversity because it leads to greater competition for the company’s business and ultimately to lower prices and better service. Website: Cummins Inc.
Tuesday, October 28, 2008 Marine Terminal Operators establish PortCheckThe members of the West Coast Marine Terminal Operator Agreement Oct. 28 announced that they have been contracted by the ports of Los Angeles and Long Beach to collect the Clean Truck Fee (CTF) required by the ports as part of their Clean Trucks Program. The terminal operators have established a new company called PortCheck Inc. to collect the CTF. PortCheck will operate similarly to PierPASS Inc., which was established by the WCMTOA in 2005 to create and operate the OffPeak program at the Los Angeles and Long Beach ports. PierPASS collects the Traffic Mitigation Fee that funds the five weekly OffPeak shifts on nights and Saturdays. OffPeak has been successful in diverting 40% of cargo from weekday shifts, according to the WCMTOA. PortCheck expects to begin collection of CTF payments when information system development is completed, which is anticipated to be sometime in November. Enforcement of the ban on trucks older than model year 1989 began on Oct. 1. Information on the Clean Trucks Program is available at the ports’ Web sites. Website: PortCheck Inc.
UPS buys first hydraulic hybridUPS today announced its first purchases of a little-known technology — the hydraulic hybrid vehicle — that promises dramatic fuel savings and environmental benefits. The technology, originally developed in a federal laboratory of the U.S. Environmental Protection Agency, stores energy by compressing hydraulic fluid under pressure in a large chamber. UPS was the only company in its industry asked to road-test the technology two years ago and now becomes the first delivery company to place an order for hydraulic hybrid vehicles (HHV). “There is no question that hydraulic hybrids, although little known to the public, are ready for prime time use on the streets of America,” said David Abney, UPS’s chief operating officer. “We are not declaring hydraulic hybrids a panacea for our energy woes, but this technology certainly is as promising as anything we’ve seen to date.” UPS and the EPA said the prototype vehicle had achieved a 45%-50% improvement in fuel economy compared to conventional diesel delivery trucks. UPS believes similar fuel economy improvements and a 30% reduction in CO2 are achievable in daily, real-world use. UPS will deploy the first two of the new HHVs in Minneapolis during the first quarter of 2009. Website: UPS
DHL Express partners with Polar AirDHL Express Oct. 27 launched its TransPacific partnership with Polar Air Cargo, a subsidiary of Atlas Air Worldwide Holdings Inc., strengthening DHL’s position in the international express market through an improved offering on one of its major intercontinental trade lanes. A Block Space Agreement guarantees DHL Express access to six Polar Air Cargo Boeing 747-400F aircraft that will serve eight key destinations in Asia and the U.S. DHL will utilize Polar Air Cargo’s scheduled weekday flights from Los Angeles, Wilmington, and New York via Anchorage to the Asian destinations of Hong Kong, Shanghai, Seoul, and Tokyo. In addition, the partnership also covers an extended weekend schedule, with flights to Honolulu, Sydney, Sharjah, and Leipzig. Volume on DHL’s TransPacific routes has been steadily increasing in recent years and despite a slowdown in 2008, overall TransPacific air cargo volume is expected to show double digit growth in the mid-term. DHL Express has also increased the frequency of its dedicated Air Hong Kong flights from Hong Kong to Nagoya, Taipei, Seoul, and Singapore. Website: DHL Express
Wednesday, October 29, 2008 Power outage changes TWIC dateThe U.S. Coast Guard Oct. 27 announced a new compliance date for implementation of the Transportation Worker Identification Credential (TWIC) for owners and operators of facilities located within the Coast Guard Captain of the Port Zones of Buffalo, N.Y., Duluth, Minn., Detroit and Sault Ste. Marie, Mich., and Lake Michigan. Monday, Dec. 1, 2008, is the new compliance date. The original Oct. 31, 2008, compliance date for these facilities was extended due to a power outage at a Transportation Security Administration facility, which has delayed the activation of some TWICs. TWIC activations nationwide have been rescheduled to begin again the week of Nov. 10, 2008, at which point workers on the Great Lakes, and at ports with compliance dates on or before Dec 1, 2008, will be able to activate their TWICs, according to the Coast Guard. Activation for all other ports will be available nationwide later in November. The final compliance date for all licensed and documented merchant mariners and vessel operators who are required to have a TWIC remains April 15, 2009, the Coast Guard said. Transportation Worker Identification Credentials serve as an identification card for all personnel requiring unescorted access to secure areas within a port. Website: U.S. Coast Guard/TWIC
MOL resigns from Stabilization AgreementsTokyo-based MOL Oct. 28 announced that it will resign from the Transpacific Stabilization Agreement and the Canada Transpacific Stabilization Agreement), effective Nov. 27. “With the European Union’s abolition of liner anti-trust immunity, it has become extremely difficult to align the business processes of our entire organization when its regional divisions must operate to differing standards,” said Masakazu Yakushiji, executive VP in charge of MOL’s Liner Division. MOL has been a member of TSA and CTSA since their inceptions in 1989 but resigned from the west-bound discussion agreements in June 2005. “MOL has several capabilities that move us ahead of the pack,” added Yakushiji. “These differentiators include our new rapid bid capability, enhanced sales and customer service organizations designed to focus on what truly adds value for our customers, and our round-trip yield management process which improves efficiencies.” MOL operates one of the largest networks of liner and logistics services around the globe, including weekly Transpacific, Transatlantic, Americas, and Asia-Europe services. Website: MOL
Houston port approves $6 million in projectsAt its regular meeting Oct. 28, the Port Commission of the Port of Houston Authority (PHA) approved about $6 million in awards, including a $5.5 million payment for additional electrical energy costs to Direct Energy L.P. The port commission previously had awarded a 36-month fixed price ($0.0877/kwhr) electric energy contract to Direct Energy for $11.25 million, with a contract end date of Sept. 30, 2009. Electric energy usage has increased over the original contract amount, however, due to additional business activities and electric dredging, port authorities said. The port commission approved an amendment to the port authority’s electrical energy contract with Direct Energy of $5.5 million. The company will sell additional electric energy to the PHA at the original fixed price through the current contract end date, which staff recommends as reasonable, port authorities said. Also approved by the commission was $535,950 for the establishment of a parking facility and expanded parking for visitors without TWICs. The commissioners also endorsed a Memorandum of Understanding with Galveston Bay Foundation to restore habitat in Burnett Bay. Website: Port of Houston Authority
Thursday, October 30, 2008 FMC challenges ports’ Clean Trucks ProgramsThe Federal Maritime Commission Oct. 29 voted 2 to 1 to seek a court order to block portions of the Clean Trucks Programs at the ports of Los Angeles and Long Beach. The 1984 Shipping Act directs the Federal Maritime Commission to evaluate the potential anti-competitive impacts of all agreements, according to Karen V. Gregory, commission press secretary. The commission found that certain portions of the Clean Truck Programs “are likely, by a reduction in competition, to produce an unreasonable increase in transportation cost or unreasonable reduction in service.” Commissioner Joseph E. Brennan dissented from this determination, saying that he is “appalled that the commission’s decision to seek an injunction displays a bureaucratic arrogance and ignores the felt needs of the citizens of Los Angeles to clean up their air, expand their port, and promote a living wage for truck drivers working at the port.” The Clean Trucks Programs began Oct. 1. “The Clean Trucks Program has proven to be highly competitive,” the Port of Los Angeles said in a statement. “We believe the Federal Maritime Commission fundamentally misunderstands the nature of the Clean Trucks Program.” Website: Federal Maritime Commission
Port of Seattle delays BNSF acquisitionPort of Seattle CEO Tay Yoshitani Oct. 28 announced a delay until the first quarter of 2009 in the acquisition of the 42-mile BNSF Eastside Rail Corridor in King and Snohomish counties. The two agencies agreed to the delay because of ongoing difficulties in the nation’s municipal bond markets. The port intends to sell municipal bonds to finance the $107 million acquisition. “Many local governments across the nation are delaying or postponing projects because they can’t sell the bonds to finance them right now,” said Yoshitani. “The port remains committed to placing the corridor into public ownership. BNSF understands the situation and agreed to this short delay.” The Port of Seattle announced final plans to acquire the corridor in November 2007. Currently, the transaction is before the Surface Transportation Board, which must approve the transaction. King County will contribute $2 million for an easement to develop a trail along the property. Once the deal is final, the port will host a public process to determine how the corridor will be used for both transportation and recreation in the future, port authorities said. Website: Port of Seattle
FedEx Ground breaks ground on 77-acre hub siteA formal groundbreaking ceremony took place Oct. 29 for a 77-acre site in Troutdale, Ore., where FedEx Ground, a subsidiary of FedEx Corp., will build a distribution hub that will be double the size of the existing operation in Portland. The 415,000-sq.-ft. facility will be built in the new Troutdale Reynolds Industrial Park and will cost about $100 million, including land, construction, and material-handling equipment, FedEx said. Scheduled to open in 2010, the hub will feature the latest automated material handling technology designed to initially process 25,000 packages per hour and eventually 45,000 packages per hour when it reaches full capacity after a projected expansion. The workforce at opening is projected to include more than 500 full-time and part-time employees and about 200 independent contractor opportunities, many of which will transfer from the current facility. The new FedEx Ground hub is part of a nationwide network expansion to boost daily package volume capacity and further enhance the speed and service capabilities of its network. The Troutdale site was chosen because of its ease of access to major highways, its proximity to customers’ distribution centers, and a strong local labor pool from which to recruit employees, FedEx said. Website: FedEx
Friday, October 31, 2008 NOL down 82% for 3Q08Neptune Orient Lines (NOL) Oct. 29 reported a net profit of $35 million for 3Q08, down 82% from 3Q07. Group EBIT (earnings before interest and taxes) of $52 million for 3Q08 was down 75% from 3Q07, while third-quarter revenue was up 16% year-on-year to $2.4 billion. Ron Widdows, NOL group president and CEO, announced the results and commented, “The group continued to generate a profit in the third quarter despite the deterioration of conditions in the container shipping market.” “Reduced demand in key trade lanes, combined with cost increases and worsening global economic conditions, have adversely impacted our profit performance in the third quarter. Against this challenging backdrop, our logistics business delivered satisfactory earnings in 3Q08.” In 3Q08, NOL’s container shipping business, APL, recorded a 10% year-on-year rise in volumes in the third quarter to 622,000 FEUs, driven primarily by the intra-Asia trade as well as an increase in Asia-Europe and Transpacific backhaul volumes. “APL volumes grew on a year-on-year basis, but overall demand in the main trades slowed considerably in the third quarter,” said Widdows. Website: Neptune Orient Lines (NOL)
Management changes at Port of PortlandPort of Portland (Ore.) Aviation Director Mary Maxwell has announced her retirement, effective March 31, 2009. Steve Schreiber, the port’s current CFO and director of operations, will assume the role of aviation director — a position in which he served from 2000 to 2004 — effective April 1, 2009. “Mary has served the port with distinction for more than 20 years,” said Bill Wyatt, executive director. “We all owe her a debt of gratitude for her excellent service to the port.” According to Wyatt, Maxwell’s announcement and the fact that the port is entering what promises to be a very challenging time for the port’s aviation and marine operations necessitates additional realignment of the port’s management structure. The finance and administration group will be separated from engineering and information technology to enable greater focus in both port finance and project delivery, Wyatt said. Stan Watters will serve in the newly created director of development services and information technology position, effective immediately. Vince Granato, the port’s current general manager of financial services, has been appointed as the new chief financial officer and director of administrative services, effective April 1, 2009. Website: Port of Portland
Panama Canal FY08 metrics releasedThe Panama Canal Authority (ACP) Oct. 24 announced its operational metrics for its 2008 fiscal year. Year-end (October 2007 – September 2008) statistics reveal a marginal decline in total transits and tonnage when compared to FY07. However, the canal also experienced growth in core segments, most notably tanker and passenger transits. Total canal transits remained fairly constant, with a slight decline of 0.1%, from 14,721 to 14,702 transits. Booked transits (excluding auctioned slots) increased 3.9%, from 7,857 to 8,167 transits. Panama Canal/Universal Measurement System (PC/UMS) tonnage decreased 1.1%, from 312.9 million PC/UMS tons to 309.6 million PC/UMS tons. Tanker traffic jumped this year by 4.8%, from 1,972 to 2,067 transits, mainly as a result of stronger movements of petroleum from the U.S. Gulf Coast to Chile for electricity generation, as natural gas supplies coming from Argentina were suspended, according to the ACP. Tanker tonnage also increased 8.6%. Canal Waters Time (CWT), the average time it takes a vessel to navigate the canal including waiting time, increased 13.3%. “As evidenced by these fiscal year metrics, the Panama Canal remains on sound operational footing,” commented Manuel Benítez, executive VP of Operations. Website: Panama Canal Authority
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