Friday, August 29, 2008

China Shipping Container Profit Falls on Fuel, Slower Trade

China Shipping Container Profit Falls on Fuel, Slower Trade

China Shipping Container Lines Co., the country's second-largest cargo-box carrier, said first-half profit dropped 45 percent after fuel costs surged and the global economic slowdown stunted demand.

Net income fell to 637.2 million yuan ($93 million), or 0.05 yuan a share, from a restated 1.16 billion yuan, or 0.12 yuan, a year earlier, the Shanghai-based company said in a Hong Kong stock exchange statement late yesterday. Sales increased 4.8 percent to 18.2 billion yuan.

China Shipping follows Orient Overseas (International) Ltd. and Neptune Orient Lines Ltd. in reporting lower profit because of higher fuel costs and slower demand in the U.S. and Europe. The company also said it's ``hard to be optimistic'' about the rest of the year because of the world economy and excess capacity in the global fleet.

``The second-half doesn't look great as the economic slowdown will curb Christmas sales,'' said Jack Xu, a Sinopac Securities Asia Ltd. analyst in Shanghai. ``Freight rates are not good as overall demand in Europe and the U.S. is weak.''

Container Volume

China Shipping's container volume rose 7.3 percent in the first half to 3.6 million boxes in the first half. Traffic on domestic routes gained 13 percent, European shipments declined 2.1 percent and transpacific shipments plunged 12 percent.

The shipping line fell 1.5 percent to HK$1.94 in Hong Kong trading, before yesterday's earnings announcement. The stock is down 58 percent this year, compared with the benchmark Hang Seng Index's 24 percent decline. Its Shanghai shares have plunged 70 percent to 3.63 yuan.

China Shipping paid an average of $540.61 per ton for fuel in the first half, 67 percent more than a year earlier, it said.

``The surging oil price cut gains significantly,'' said Xu. The price of 380 Centistoke bunker fuel, used by ships, hit a record high of $764.50 on July 15 in Singapore trading. It has since slipped 12 percent in line with falling oil prices.

The company will buy its parent's terminal unit for 2.6 billion yuan to add facilities in 14 Chinese ports, it said on Aug. 6. The purchase will enable the container line to reduce handling costs as it grapples with rising fuel prices and slowing export growth.

Neptune Orient, Southeast Asia's largest container-shipping company, reported a 19 percent decline in second-quarter profit, the first drop in five quarters. First-half operating profit at Orient Overseas, Hong Kong's largest container line, fell 27 percent. Net income plunged 93 percent after a year-earlier one- time gain.

Under domestic accounting standards, China Shipping Container's net income fell 43 percent to 699 million yuan.

Source : 

Alternative Low-cost Terminal Will Seriously Impair Conditions for Cargo Traffic at Copenhagen Airport

Alternative Low-cost Terminal Will Seriously Impair Conditions for Cargo Traffic at Copenhagen Airport

Establishing a passenger terminal in the airport’s cargo area will seriously impair conditions for the growing cargo traffic in the south-eastern area which has been developed especially for that purpose. That is Copenhagen Airport’s conclusion after a meeting held today with the investor group behind the proposed project of building an alternative low-cost terminal.

Copenhagen Airports A/S has for some time been asking the investor group to specify the plans enough for it to determine whether it would warrant further consideration.

“After the meeting today, I must say that the proposed project is just not good enough. It could very well be highly profitable for the investors – in the same way as if I was able to force through a plan of setting up a platform of my own in the Copenhagen central railway station or my own grand stand in the “Parken” national stadium. But as the proposed project does not at all fit in with the overall plan for the airport, going ahead with the proposed project would lead to poor transport conditions for passengers, a sharp deterioration of conditions for cargo traffic at the airport and a number of unsolved operational and capacity problems within the airport area,” said Brian Petersen, CEO of Copenhagen Airports A/S.

Cargo traffic is growing

The proposed area in the cargo section is particularly attractive for the expanding cargo operators as this is the last area at the airport available for setting up logistics operations that can provide the very attractive direct connection between roads/buildings and the airport which is so crucial to effective logistics operations.

“Cargo traffic, which is crucial to Danish trade and industry, has been growing in recent years; last year the growth rate was 4.1%. This has to a great extent been achieved through the attractive conditions at Copenhagen Airport; otherwise the business growth would have occurred in competing airports in Sweden and Germany. CPH considers it important that this growth can continue and should not be stopped because of a passenger terminal in the wrong location,” said Petersen.

Extra security

Furthermore, there is a requirement throughout the EU that a high-security area is established in airfields around passenger terminals and piers, a so-called CSRA. At Copenhagen Airport, the CSRA has been established over the past couple of years, with extensive security screening of vehicles, persons and goods going into the area. A passenger terminal in the cargo area would make it necessary to turn the entire area into a CSRA, whereas that is not a requirement for cargo operations.

“When we established the CSRA, we held talks with the cargo operators to get their opinion as to whether it would be acceptable to them to carry on their daily operations in a CSRA. The answer was a unanimous no, and several operators emphasised that that would make them consider relocating to other airports. So it is quite clear that a passenger terminal in the area will seriously impair conditions for cargo traffic,” said Petersen.

Three kilometres from trains and metro

More than 50% of Copenhagen Airport’s passengers now travel to the airport by train or metro, which are both fully integrated with Terminal 3. The transport time of about 15 minutes from the city centre makes Copenhagen Airport one of the best integrated and most popular big-city airports in Europe.

“The south-eastern corner of the airport is probably the last place we would place a passenger terminal ourselves. The distance to public transport and the roads to the area make it infeasible,” said Brian Petersen

Copenhagen Airport intends to invest in more low-cost traffic

“But as I also said when the proposed project was presented in late June, we agree with the investor group in one respect: Low-cost traffic at Copenhagen Airport has grown a lot and holds the potential to grow a lot more, for the benefit of passengers, trade and industry and the region as a whole. We are therefore working intensely to develop facilities addressing the demands of low-cost airlines for even lower costs and faster turn-around times. I expect to be able to present our overall plans by the end of September,” said Petersen.

Source: Copenhagen Airport

NOL CEO says buying Hapag-Lloyd risky-report

NOL CEO says buying Hapag-Lloyd risky-report

Singapore's Neptune Orient Lines (NOL) has not yet decided whether to go through with a bid for Germany's Hapag-Lloyd and the market environment for a purchase has deteriorated, NOL's CEO told a German newspaper.

NOL last month submitted an indicative bid for Hapag-Lloyd, the shipping arm of Germany's TUI, in a deal that would create the world's third-biggest container shipping group.

"We still have not decided whether we will definitely submit an offer," CEO Ronald Widdows was quoted as saying in German daily Die Welt in a preview of its Wednesday edition.

The paper said NOL would a final decision by the end of September.

NOL and a group of Hamburg-based investors are the two bidders in the race for the world's fifth-largest container shipping group.

"The market is falling dramatically at the moment, making it ever more risky to buy an integrated company like Hapag-Lloyd," Widdows said.

Soaring fuel costs and a slowing world economy are dampening growth in the shipping industry. Widdows said Hapag-Lloyd would suffer from this like all other container shipping groups and that this needed observing.

He added however that NOL is still looking to expand through acquisitions. (Reporting Sylvia Westall; editing by Elaine Hardcastle).

FRANKFURT, Aug 26 (Reuters)

Thursday, August 28, 2008

Shipping Fuel Surcharges Grow As Oil Cost Falls

Shipping Fuel Surcharges Grow As Oil Cost Falls

The cost of oil is coming down fast after a summer spike, but many Hawaii consumers are left wondering when they'll see a break from hefty "fuel surcharges." Hawaii's ocean carriers are going ahead with big fuel surcharge increases soon despite oil prices heading in the opposite direction. As of Aug. 31, Matson is boosting its fuel surcharge to 42.25 percent, 4 points but 10 percent higher than it's already tacking on top of the thousands it costs to ship a container. That matches what Horizon Lines put into effect Sunday. Pasha will push up their surcharge to 37.25 percent at the end of the month.

"That's over $2 million in fuel surcharges for 1 voyage,” said Jason Hartley regarding the Matson and Horizon costs. Hartley is a California antitrust attorney representing plaintiffs in one of several lawsuits over the fuel surcharges. “We know that no vessel is burning $2 million in fuel on a single voyage between Hawaii and the mainland."

KHON2 asked Matson and Horizon why surcharges continue to grow, with oil prices coming back down to earth, down 17 percent in just over a month. Horizon lines has been pointing out to some of their customers that while the cost of crude oil has been dropping, they have yet to see the same on their bills for bunker fuel.

Matson says of its diesel and bunker fuel: “We are starting to see a downward trend, but you have to recognize that there were still enormous spikes this year,” according to spokesperson Jeff Hull.

"While the current trend is encouraging, we have to wait to see if this really holds," Hull said.

"I think they're unjust and unreasonable,” Hartley said. “And the real frustration as I've talked to so many different consumers and shippers in Hawaii is they feel there's nothing they can do about it."

Matson points out the surcharge only means 2 cents per 12-oz canned beverage for instance, or about 35 cents per 20-pounder of rice.

Critics contend that's disproportionate to what fuel is really costing.

"When you mask this profit-making machine as a fuel surcharge it's easier for the consumer to swallow," Hartley said.

Fuel surcharges have embroiled the companies with now 19 antitrust lawsuits alleging Horizon and Matson conspired to raise their Hawaii surcharges in lockstep, and alleging what they charge outpaces fuel cost hikes by thousands of percent.

Last week those 19 lawsuits were consolidated into one giant litigation that will be tried in Seattle.

The Surface Transportation Board that regulates ocean shipping has heard an earful about Hawaii surcharges from freight companies, local leaders and even the state attorney general. They could tackle this in response to formal complaints.

Our series examining fuel surcharges continues in the coming days with your utility bill, and what you're paying at the pump.

Source : Source - Khon2 - 21 August 2008

More Containers Are Falling Overboard

More Containers Are Falling Overboard

The P&O Nedlloyd Mondriaan was steaming off the coast of the Netherlands with its decks stacked high with containers from the Far East on Feb. 9, 2006, when it was hit from astern with waves driven by winds of force 8 to 9 on the Beaufort scale. As the vessel rolled with the waves, 59 loaded containers tumbled overboard.

Ten days later, as the 7,500-TEU vessel was returning to the Far East with a cargo of empty containers, it ran into another storm in the Bay of Biscay, with headwinds of the same gale force. The ship lost another 50 containers. On the same day in the same storm in about the same location, the CMA CGM Otello, a vessel of approximately the same capacity but of a different design, lost 50 boxes.

These incidents were among the first of a mounting tally of containers lost overboard during the last two years. In 2006 and 2007, there were “significant” incidents where at least 36 ships lost a total of more than 1,600 boxes overboard. The full extent of the problem is unclear because there’s no central repository for the data, and many ship lines understandably aren’t eager to publicize lost containers.

“There appears to be a trend of near-catastrophic losses of containers stowed on deck of container ships,” said James Craig, president of the American Institute of Marine Underwriters.

One reason for that trend is the practice of loading heavier containers on top of lighter boxes. That has become more common as ships get larger and carry ever more containers.

Container stacks above deck can vary in height between four to 10 or more high and it’s usually just the lower boxes that are cross-braced, leaving the top containers at the mercy of the pin locks on the four corners of the can holding it to the next, said Rick Bridges, vice president of Roanoke Trade Services, an insurance broker.

Unfortunately, shippers really can’t do much to prevent their cargo from going overboard, he said. In most cases, the carriers decide where the container is placed, he said. “Considerations such as commodity, weight, destination or transship points all are taken into account. So in short, the shipper cannot choose whether he is above or below deck,” he said.

As far as anything shippers can do to be proactive in preventing damage due to rolling and pitching of the vessel, Bridges suggests that they hire a surveyor to show them how to properly block and brace cargo.

“This goes a long way, especially if there is a claim where the suitability of packing is brought into question by the insurance company or steamship line. If the shipper can go back and prove that packing was performed as recommended by an accredited surveyor, then they stand a much better chance of getting their claim settled without issues,” he said.

Source : Shipping Digest, July 28, 2008

Wednesday, August 27, 2008

Singapore Crosses One Billion Shipping Tonnage Mark Early

Singapore Crosses One Billion Shipping Tonnage Mark Early

The Singapore maritime industry has crossed the one billion gross tons shipping tonnage mark way ahead than usual, judged against previous years. In terms of timescale, the mark was achieved four months ahead compared to four years ago when the shipping tonnage surpassed the billionth figure in December in 2004.

The vessel, which had the honor of crossing the one billion mark, was APL Australia, a container ship of 50,243 gross tons (GT). It arrived at the port on Aug 14 at 1025hrs.

Said Capt M Segar, Group Director (Hub Port), Maritime and Port Authority of Singapore, “Over the past few years, vessel arrivals in terms of shipping tonnage have registered double-digit increase. This new high in terms of timescale for the one billion breakthrough signals that 2008 may very well be another record breaking year for the Singapore port. All these achievements are possible because of the efforts put in by our port and maritime community in ensuring that Singapore port continues to add value and provide quality services to the global shipping community.”

In 2004, the billionth shipping tonnage record was achieved in the month of December. Subsequently, the billionth mark for 2005, 2006, and 2007 was achieved in November, October and September respectively. Vessel arrivals in terms of shipping tonnage have been increasing over the past few years: 1.042 billion GT in 2004, 1.152 billion GT in 2005, 1.315 billion GT in 2006, and 1.459 billion GT in 2007.

Logistics Insight Asia - Top Story, 25/8/2008

Borouge Awards Contract to Agility for the Shanghai Logistic Hub Services

Borouge Awards Contract to Agility for the Shanghai Logistic Hub Services

Borouge has awarded a service contract to Agility (Abu Dhabi) PJSC to build the Borouge Compound Manufacturing Unit (CMU) and Shanghai Logistics Hub in Shanghai, China, and to provide local logistics services for Borouge’s customers in Asia for a duration of 10 years with effect from its operational start up date in 2010.

Following the contract win, Agility will undertake the design, development and subsequent operation of the logistics hub, to ensure sufficient infrastructure, storage facilities, packaging and distribution services to accommodate Borouge’s products dispatched from Abu Dhabi in the United Arab Emirates (UAE). Agility will handle and distribute a total volume of approximately 600 kilotonnes of polyolefins out of the Shanghai logistics hub annually.

Borouge’s current production capacity in the UAE is 600 kilotonnes of Borstar polyethylene per year. With the ongoing Borouge 2 project expansion, this capacity will increase to 2 million tonnes per year by the middle of 2010 and will add polypropylene to the product mix. Construction of the Borouge 2 facility has already started and consists of a 1.5 million tonne ethane cracker, the world’s largest olefins conversion unit (with a capacity of 750 kilotonnes), two Borstar polypropylene plants with a total capacity of 800 kilotonnes and a 540 kilotonne Borstar polyethylene plant.

Abdulaziz Alhajri, CEO of Abu Dhabi Polymers, the Borouge manufacturing company, explained: “The Shanghai logistics hub is one of several regional logistics hubs that will provide storage and logistics support for our operations close to our customers. It will enable us to provide a fast, flexible delivery service to our customers, for all of Borouge’s high value product lines. Agility comes to us with a strong reputation in the global logistics market for delivering cost-effective and robust solutions. Hence, we had no hesitation to select them as a partner in this endeavor.”

Philip Browitt, President of the Agility Chemical Speciality business explained: “At Agility we provide truly integrated logistics solutions to a wide range of industries leveraging our vast global network and differentiated by our focus on personal service. For the Borouge Shanghai Logistics Hub & CMU, we combined our chemical knowledge and industry heritage with the expertise of Agility Abu Dhabi and Agility China to differentiate and win this project. We enjoy a proven track record in the global chemical logistics sector and are delighted to extend the highest level of our professional services to Borouge and its customers in the region.”

Logistics Insight Asia - Industry News, 18/8/2008

Tuesday, August 26, 2008

Abu Dhabi Airport welcomes AirBlue

Abu Dhabi Airport welcomes AirBlue

Touching down at 12:00hrs local time today, Abu Dhabi International Airport welcomed the first commercial flight into the UAE capital by AirBlue, Pakistan?s largest privately-operated airline.

Initially set to operate four flights per week from Lahore to Abu Dhabi, AirBlue officials at the reception ceremony, held in honour of the occasion, signalled that it proposes to increase these frequencies, in line with demand, to a twice daily service in the near future.

With an estimated 300,000 Pakistani expatriates living in the Emirate of Abu Dhabi ? around 50 per cent of the UAE?s total Pakistani community ? AirBlue?s new routes will immediately benefit a significant population of workers and families in the country by offering greater options and benefits for travel between the two countries.

Having already established strong domestic operations in Pakistan from the airline?s commencement of operations in 2004, AirBlue?s commitment and prioritization towards servicing the important UAE-Pakistan route is clear as Abu Dhabi becomes the airline?s third international destination and second into the UAE.

At the welcome ceremony held at the Al Dar Lounge at Abu Dhabi International Airport today, Sarosh Bhatti, General Manager - Marketing of Airblue said: "We are extremely pleased to be opening up a route into Abu Dhabi as the city and Emirate represents a key market as we move to extend our international network.?"

We are certain that the Abu Dhabi - Pakistan route will serve a growing number of passengers between our two countries and we are hopeful that demand will see us able to increase our frequencies to and from the UAE capital in a short period of time.?

In addition to AirBlue increasing its international network, another milestone was noted at the reception ceremony today as Abu Dhabi Airports Company celebrated Air Blue?s arrival by confirming that the Pakistani carrier was the 40th airline to operate out of the Abu Dhabi International Airport.

Mohammed Al Bulooki, VP, Airline Marketing and Aeronautical Revenue, ADAC said: "We are, of course, pleased to welcome AirBlue to Abu Dhabi on this unique occasion but it is also pleasing to note that their arrival is reason for further celebration in that the airline becomes the 40th airline to operate from Abu Dhabi International Airport. In line with the expansion and planning efforts, it is clear that an ever increasing number of commercial carriers are seeing the benefits of operating from the UAE capital and Emirate of Abu Dhabi.?"

This in turn provides greater accessibility to key destinations worldwide and, importantly, greater choice for all our existing and future passengers.?

From 24 August, Air Blue will operate the service on Tuesdays, Thursdays, Saturdays and Sundays. In-bound flights will arrive in Abu Dhabi at 12:00hrs (13:00hrs after 1 September) and out-bound flights will depart at 13:00hrs (14:00hrs after 1 September). Average flight time is three hours.

Source: Abu Dhabi Airports Company

Shippers Face Multiple Challenges

Shippers Face Multiple Challenges

Life isn’t easy these days if you’re a shipper. Shortages of vessel space and equipment, service changes by the carriers and multiple increases in freight rates and surcharges over the past year have combined to make the job even more challenging than it was.

“You’re just going nuts taking all these rates,” said Ron Bailey, manager of Brewster Lines, a non-vessel-operating common carrier that serves UniGroup Worldwide UTS. Its parent company, UniGroup, owns United Van Lines and Mayflower Transit.

Bailey said he has had up to 14 increases in freight rates and surcharges from one carrier in a single week.

The surcharges include bunker adjustment factors, emergency bunker adjustment factors, currency adjustment factors, inland fuel surcharges, terminal handling charges, container service charges, chassis usage charges, hazardous cargo charges, documentation fees, Panama Canal transit fees, port terminal security charges, low-sulfur fuel charges and Alameda Corridor surcharges.

Once Brewster gives customers a price quote, it has to keep that quote, Bailey said, though his costs may rise because of increases in freight rates and surcharges. And if a shipment misses a scheduled sailing because the carrier has overbooked, there can be a snowball effect. Besides the delay while the container waits for another sailing, there are the increased chances for missing paperwork and Customs holds.

Brewster has to eat additional delivery, storage and packing costs that might flow from the missed sailing. As for its customers moving overseas, they may have to stay at a hotel, buy new clothes and either buy or rent furniture and a car, and eat out, while they wait for their shipment to arrive. That does not make for happy customers.

“We must do all we can to make certain we have a means of getting a shipment from Point A to Point B,” Bailey said. Like other shippers, he admits to double booking some shipments with different carriers in the hope that one of them will have equipment and service in place.

Service cutbacks and route changes by the carriers have made it harder to find carriers at some ports, Bailey said, citing Charleston and Savannah as examples. “If you’re shipping out of Atlanta, and you have to go to Charleston instead of Savannah, it will cost you more,” he said.

Equipment shortages at inland cities are another problem, Bailey said, citing Phoenix as an example. He has sometimes had to wait three or four weeks to get a container there. Those shortages have been exacerbated by the elimination of inland depots by some carriers.

Carrier mergers and vessel-sharing alliances have also reduced the options for shippers, he said, citing Maersk Line’s acquisition of P&O Nedlloyd and the possibility that Neptune Orient Lines, which owns APL, will buy Hapag-Lloyd.

Four or five carriers may share space on the same vessel, but that does not mean that each of them will be able to handle cargo to and from each port where the vessel calls, he said.

Bailey said some carriers will not accept household goods shipments to certain destinations such as India. That’s because the lines have been burned when people file false commodity declarations. The shippers might declare that the cargo is household goods when it was actually junk tires or old computers. It was cheaper for them to ship the goods overseas rather than to dispose of them legally in the U.S., he said.

As a result, Brewster will not accept any household goods that are packed by the owner. Instead, it will send its own truck to the home to pick up the goods and take them to Brewster’s warehouse where they will be packed into marine containers.

Source : Shipping Diggest - William Armbruster - August 25, 2008

Monday, August 25, 2008

Shipping Fuel Surcharges Grow As Oil Cost Falls

Shipping Fuel Surcharges Grow As Oil Cost Falls

The cost of oil is coming down fast after a summer spike, but many Hawaii consumers are left wondering when they'll see a break from hefty "fuel surcharges." Hawaii's ocean carriers are going ahead with big fuel surcharge increases soon despite oil prices heading in the opposite direction. As of Aug. 31, Matson is boosting its fuel surcharge to 42.25 percent, 4 points but 10 percent higher than it's already tacking on top of the thousands it costs to ship a container. That matches what Horizon Lines put into effect Sunday.

Pasha will push up their surcharge to 37.25 percent at the end of the month.  "That's over $2 million in fuel surcharges for 1 voyage,” said Jason Hartley regarding the Matson and Horizon costs. Hartley is a California antitrust attorney representing plaintiffs in one of several lawsuits over the fuel surcharges. “We know that no vessel is burning $2 million in fuel on a single voyage between Hawaii and the mainland."

KHON2 asked Matson and Horizon why surcharges continue to grow, with oil prices coming back down to earth, down 17 percent in just over a month. Horizon lines has been pointing out to some of their customers that while the cost of crude oil has been dropping, they have yet to see the same on their bills for bunker fuel.

Matson says of its diesel and bunker fuel: “We are starting to see a downward trend, but you have to recognize that there were still enormous spikes this year,” according to spokesperson Jeff Hull.

"While the current trend is encouraging, we have to wait to see if this really holds," Hull said.

"I think they're unjust and unreasonable,” Hartley said. “And the real frustration as I've talked to so many different consumers and shippers in Hawaii is they feel there's nothing they can do about it."

Matson points out the surcharge only means 2 cents per 12-oz canned beverage for instance, or about 35 cents per 20-pounder of rice.

Critics contend that's disproportionate to what fuel is really costing.

"When you mask this profit-making machine as a fuel surcharge it's easier for the consumer to swallow," Hartley said. Fuel surcharges have embroiled the companies with now 19 antitrust lawsuits alleging Horizon and Matson conspired to raise their Hawaii surcharges in lockstep, and alleging what they charge outpaces fuel cost hikes by thousands of percent. Last week those 19 lawsuits were consolidated into one giant litigation that will be tried in Seattle.

The Surface Transportation Board that regulates ocean shipping has heard an earful about Hawaii surcharges from freight companies, local leaders and even the state attorney general. They could tackle this in response to formal complaints.

Our series examining fuel surcharges continues in the coming days with your utility bill, and what you're paying at the pump.

Source : Khon2 - SeaRates - 21 Aug 2008

Hanjin Shipping Orders Five 10,000TEU Containerships

Hanjin Shipping Orders Five 10,000TEU Containerships

Hanjin Shipping has become the first Korean carrier to place an order of five 10,000TEU containerships. At Hotel Shilla in Seoul at 5 pm on August 24, 2006, Hanjin Shipping President & CEO Jung-won Park and Samsung Heavy Industries CEO Jing-wan Kim signed the contract for building five 10,000 TEU vessels. The five vessels ordered are scheduled for successive deployment from February of 2010 on Hanjin's trans-Pacific trade and expected to provide better customer service and rationalize the company's fleet operation.

The order of super-sized containerships is in line with Hanjin's mid-to-long-term strategy to lead the global shipping market increasingly dominated by large vessels.

Hanjin Shipping has committed itself to better service by enlarging its container fleet. A total of eight owned 6,500TEU vessels were ordered in 2003 through 2004 and started to be deployed on the Asia-Europe trade from the second half of 2006. And large 8,000TEU containerships began to be deployed successively on the trans-Pacific trade from the second half of 2005.

Currently operating 80 containerships on 60 lanes worldwide, Hanjin Shipping has and will continue to expand and rationalize its fleet and strengthen ties with the CKYH Alliance. Furthermore, the Korea's largest ocean carrier will remain committed to change and innovation as it struggles to become "the premier total logistics company most trusted by customers worldwide."

Maersk Launches The Boomerang Service

Maersk Launches The Boomerang Service

Maersk Line launched the enhanced Asia to Australia service, which will bring a unique and innovative solution to servicing the Australian market. In creating a new and comprehensive 'pendulum loop', Maersk Line has combined three existing services into one single rotation. The company will deploy ten vessels allowing for the optimal combination of efficiency through size and ability to operate at economical speeds.

The new Asia - Australia service, which we will phase in on 27 September 2008, is named the 'Boomerang Service' to reflect its relation to Australia and to emphasise the strong link this service creates to the key economic areas in South East Asia and North East Asia.

Maersk Line will offer its customers a comprehensive and consistent coverage through a single and effective product. Furthermore, the new schedule will ensure an increased reliability.

The new service combines the present AU1 (North Asia to/from Australia), AU2 (East Asia to/from Australia), and AU3 (South East Asia to/from Australia) services and will offer its customers the following rotation:

Boomerang - North East Asia (Southbound): Yokohama (Japan), Nagoya (Japan), Osaka (Japan), Busan (South Korea), Qingdao (China), Shanghai (China), Ningbo (China), Chiwan (China), Hong Kong, Kaohsiung (Taiwan), Sydney (Australia), Melbourne (Australia), and Fremantle (Australia).

Boomerang - North East Asia (Northbound): Fremantle (Australia), Melbourne (Australia), Sydney (Australia), Brisbane (Australia), Yokohama (Japan), Nagoya (Japan), Osaka (Japan), Busan (South Korea), Qingdao (China), Shanghai (China), Ningbo (China), Chiwan (China), Hong Kong (HK), and Kaohsiung (Taiwan).

Boomerang - South East Asia (Southbound): Singapore, Tanjung Pelepas (Malaysia), Fremantle (Australia), Melbourne (Australia), Sydney (Australia), and Brisbane (Australia).

Boomerang - South East Asia (Northbound): Sydney (Australia), Melbourne (Australia), Fremantle (Australia), Singapore, and Tanjung Pelepas (Malaysia).

Source : TransportWeekly, 21 August 2008

Saturday, August 23, 2008

NOL to Retain Hapag-Lloyd Brand & Staff

NOL to Retain Hapag-Lloyd Brand & Staff

The new head of Neptune Orient Lines (NOL), Mr Ron Widdows, has promised that he will retain the staff and the brand name of Hapag-Lloyd should his bid for the fifth biggest container line succeed, Exim News Service reports.

Mr Widdows, who was till recently the head of NOL’s container arm, APL, said that Hapag-Lloyd staff should look on the bright side, recalling how he had prospered when NOL had taken over his company, the California-based American President Lines (APL), in 1997.

"I’m a personal example of how you can put two companies together and take advantage of the strength of what is inside those organisations", said Mr Widdows.

"The fact is that if APL had not been acquired by NOL, it would not exist today", he admitted as NOL battles it out with Hamburg Solution, an all-German group determined to keep the shipping line in Germany.

Telling his own story, Mr Widdows said, "APL was acquired by a foreign company, as a company, and at the time, it had a 150-year history and had many of the same emotions and concerns on the part of the people that worked for APL in terms of being acquired by a foreign company. Not only did the brand survive, but most of the organisation".

The fact that NOL is 66 per cent owned by Singapore state investor, Temasek Holdings, has added to the controversy in Germany, according to reports.

On August 19, nearly 300 Hapag-Lloyd workers protested outside the German Embassy here against the possible deal, a day before the Cabinet was due to pass a law to shield domestic firms from foreign buyers.

Source : TransportWeekly-22 August 2008

Shipping Rules Would Kill Just-in-Time Trade

Shipping Rules Would Kill Just-in-Time Trade

Security is important, but as The News reports, Detroit's automakers worry that a proposed new federal regulation requiring that additional information about cargo shipments to the United States be collected 24 hours before it is loaded in foreign ports could cost billions of dollars -- and could also be applied to land shipments from Canada. That could prove to be an economic disaster for this region.

Certainly, traffic in container cargo has risks, but U.S. manufacturers argue, reasonably, that they have already invested heavily in their own security for their supply lines of imported parts. And if the rule is applied to land shipments, Metro Detroit would suffer heavily.

Over $1 billion in goods crosses between the U.S. and Canada daily.

About $300 million of that are "just-in-time" parts shipments passing through the transportation corridor linking Detroit and Windsor, Ontario. Detroit to Windsor, the Detroit Regional Chamber notes, is the busiest trade corridor in the world.

U.S. manufacturers have told the federal government that the proposed shipping regulations could cost more than $20 billion annually, The News reports. The government's own estimate is that the cost would be $690 million, though that estimate is now under review.

Automakers have contended that the proposed requirement would result in the firms having to add several days of parts inventory, which would significantly increase their costs.

And if the regulations are applied to land shipments from Canada, notes Sarah Hubbard of the Detroit Regional Chamber, the amount of information required about the cargo couldn't be gathered in 24 hours. This is because, in many instances, parts are ordered and shipped within 24 hours.

The obvious effect would be to slow down the land shipments as well.

This, Hubbard adds, "would destroy any advantage related to manufacturing in Michigan."The proposed shipping regulations, the local business group has argued to the Bush administration, also ignore existing federal programs in which firms have already gained advance clearance as "trusted travelers" to ease shipping and border hassles.

The government wants to impose these regulations by November. Clearly, if the administration remains set on this course of action, it's time for this state's members of Congress to intervene and try to slow down the program.

Manufacturers that rely on carefully timed parts shipments are asking for at least a pilot program for the regulations to determine how well they work and whether the cost estimates of industry or the government are closer to the mark. That's not too much to ask of theBush administration -- and members of Michigan's congressional delegation shouldn't be shy about doing so.

Source : Detroit News - SeaRate - 21 August 2008

Hanjin Shipping Launches Korea-Japan Dedicated Feeder Service

Hanjin Shipping Launches Korea-Japan Dedicated Feeder Service

Hanjin Shipping has announced yesterday that it is launching a dedicated feeder service between Korea and Japan starting from August 24th, 2008.

KJS (Korea-Japan Service) is a dedicated feeder service in which one 400 TEU vessel will rotate between Busan-Tokyo-Osaka-Busan once a week. The main purpose of this service includes promoting sales within Asia and reducing vessel operation time while transshipping the Japanese local cargo to Europe and the U.S. Furthermore, Hanjin Shipping expects that the introduction of this new KJS will minimize the bottleneck situation at Asian ports for the services that call Japan. Also, transshipment at the company’s dedicated terminal in Busan will be another benefit for the company as well as its customers.

Especially, instead of having to secure vessel space from feeder lines case by case, Hanjin Shipping will be deploying its own ship that will enable the company to provide its customers with stable supply of vessel space even during the peak seasons.

Meanwhile, Hanjin Shipping plans on expanding its feeder network along with the existing services in Persia, Singapore, Bangladesh and North China.

Source : Hanjin Shipping - 15 August 2008

Czech Airlines Celebrates 70 Years of Serving Budapest

Czech Airlines Celebrates 70 Years of Serving Budapest

This month, Czech Airlines is celebrating the seventy years since the start of its scheduled air service between Prague and Hungary?s capital, Budapest. The former Czechoslovak Airlines flew to the destination for the first time in August 1938. Presently, the Airline offers three daily flights between Prague and Budapest, deploying ATR 72 and Boeing 737 aircraft, and also its most modern Airbus A319 aircraft on the most sought-after flights.

The former Czechoslovak Airlines launched its service to Budapest in the year which, given the subsequent outbreak of World War II, brought an end to the promising growth of Czechoslovak civil aviation. In spite of that, the Czechoslovak Airlines network included a total of 24 segments in 1938, 12 of which were foreign.

The Czech Airlines service between Prague and Budapest was used by 97,000 passengers last year, which constitutes a seven percent year-on-year increase. Overall, Czech Airlines operated nearly 1,030 flights between Prague and Budapest in 2007.

Czech Airlines service between Prague and Budapest is used primarily by business passengers, both by Czech business people travelling to Hungary and by Hungarian business people travelling to the Czech Republic. Departure times are set such as to also suit people travelling on business from Western Europe, Scandinavia, the Baltic States, and the USA, on their flights to Hungary, via a transfer in Prague.

During the summer flight schedule, i.e., from 30 March to 25 October, the Airline offers three daily flights to Budapest, leaving Prague at 7:15, 11:55, and 17:25. From Budapest, passengers can fly at 9:05, 14:45, and 19:15. In addition to these three connections, Czech.

Airlines passengers can make use of the morning flight in code-share cooperation with Mal?v, which takes off from Budapest at 8:20, as well as of the early evening flight at 17:35.

Source: CSA

Friday, August 22, 2008

Sabre Airline Solutions Launches Mobile Check-In Self-Service for Air One

Sabre Airline Solutions Launches Mobile Check-In Self-Service for Air One

Checking in for your flight from a taxi, in a caf?, even while dropping the kids off at school is now a reality with the launch of Sabre Airline Solutions? New Mobile Check-In solution.

Launched in conjunction with Italian carrier, AirOne, Sabre's latest innovative breakthrough allows passengers to check-in for a flight and even select their seats, using a web-enabled mobile phone. Mobile Check-In is part of the SabreSonic suite, Sabre's flagship customer sales and service solution, and integrates with other SabreSonic self-service check-in options including web and kiosk check-in, providing airlines with the broadest range of check-in options across all customer touch points.

"Self-service check-in is now a priority for many airlines as they look for ways to cut costs," said Gordon Locke, vice president of Airline Marketing for Sabre Holdings. Sabre's Mobile Check-In solution not only provides the cost benefits, more importantly it improves the customer experience, making check-in more accessible, easier and faster, a real bonus for time-constrained corporate travelers.

AirOne selected Sabre's Mobile Check-In solution because of its recognized industry leadership in providing solutions to the airline market.

"We needed a product that complemented our existing portfolio of fast passenger check-in services including self-service kiosks at airport terminals, Telecheck and web check-in," said Alfonso Razzi, CIO of AirOne. After reviewing several options, we selected Sabre because they offered an integrated solution with strong expertise in this area.

"By using Sabre Mobile Check-In we anticipate further savings on our passenger check-in costs, while also reducing congestion at airports and offering our passengers a very user-friendly service that meets the requirements of today's travelers who are increasingly relying on their mobile devices for communication and business activity," he said.

Source: Sabre Airline Solutions

JAL : Increases International Fare Fuel Surcharge

JAL : Increases International Fare Fuel Surcharge

Today the JAL Group requested approval from the Japanese Ministry of Land, Infrastructure, Transport & Tourism (MLITT), to revise the fuel surcharge placed on all international passenger tickets issued for the 3 month period starting October 1, 2008.

JAL has decided to increase the fuel surcharge for tickets issued between October 1 and December 31 2008, as the price of Singapore kerosene-type jet fuel reached record high levels during the 3 month period May - July, 2008, averaging US$163.54 per barrel.

However, after examining market trends and demand as well as the progress of its own restructuring efforts, JAL has decided not to raise fuel surcharges up to its highest level 'K'. Level 'K' would normally have come into effect as the average price of jet fuel for the 3-month benchmark period was in the range of US$160 to under US$170 per barrel.

The airline has opted instead to just increase its fuel surcharges to level 'I' which normally would only be used if the average price of jet fuel during a given 3-month benchmark period is in the range of US$140 to under US$150 per barrel.

Based on a revised fuel surcharge benchmark list for FY2008, the new surcharges per person per sector flown on tickets purchased in Japan, range from 4,000 yen on a Japan - Korea ticket (up from 3,500 yen) to 38,000 yen on a Japan- Brazil ticket (up from 32,000). The surcharge on a Japan-Europe ticket or a Japan- North America ticket will be 33,000 yen, up from 28,000 yen.

Fuel surcharges priced in Japanese yen on Japan - Hong Kong, Malaysia, Singapore, Taiwan and Thailand routes remain unchanged. JAL originally introduced the fuel surcharge on international tickets in February 2005 in response to unprecedented rises in the cost of fuel.

The surcharge will be progressively reduced as the price of fuel decreases, and will be cancelled completely when the price of Singapore kerosene stays below the benchmark of US$60.00 per barrel.

The fuel surcharge charged for tickets issued from January to March 2009 will be reviewed based on the average price of fuel for August through to October, 2008.

The company will continue conducting a wide range of countermeasures to limit the full impact of the price increase including fuel hedging, fuel consumption reductions, and the introduction of more fuel-efficient small and medium-sized aircraft to its fleet.

Source: JAL

RJ Appoints a New GSSA For Cargo Sales in Germany

RJ Appoints a New GSSA For Cargo Sales in Germany

Royal Jordanian selected Cargoworks Europe to be its general sales and services agent (GSSA) in Germany, as the airline decided to outsource cargo sales activities. Thus Cargoworks will represent RJ Cargo effective September 1, 2008.

RJ President/CEO Samer Majali said: "Cargoworks is a strong partner to RJ. It is committed to excellence in service and has high-quality people, which results in superior business success. They are using the same IT solution that RJ will install in October 2008, i.e., Cargospot."

Majali added that Cargospot is an end-to-end air cargo system developed in Switzerland and used by more than 80 international companies. It aims to improve air cargo sales, reservations, pricing, management information and handling.

With Cargospot, airline clients and their logistics partners will be able to fully benefit from all industry interfaces to finally do "e-business" with RJ.

RJ Cargo is consistently reviewing its route network. The three freighters, which include two Airbus A310s and one Boeing 737, are being operated to Damascus, Tel Aviv, Brussels, Heathrow, London Gatwick, Dubai, Khartoum, Athens, Larnaca, Istanbul, Cairo, Baghdad and Suleimanieh in Iraq. The company is currently considering opening new freighter destinations to expand its service around the world.

RJ also carries freight, courier packages and mail in the holds of Royal Jordanian wide-bodied passenger fleet to Cairo, Jeddah, Riyadh, Detroit, Chicago, Delhi, Colombo, Hong-Kong and Bangkok, and in the holds of the airline?s narrow-bodied passenger aircraft to the 42 other destinations the airline serves. Airbus A310 has a capacity of 35.5 tons and Boeing 737 of 14.4 tons.

The airline operates a 17,000 m2 cargo terminal at Queen Alia International Airport serving 30 international airline clients, and it has over 34 cargo general sales agents worldwide.

Cargoworks Europe is a private German general sales and services agent, founded in July 2004. The company, with its headquarters near Frankfurt/Main airport, has a growing network with partners worldwide.

Source: Royal Jordanaian

Thursday, August 21, 2008

Too Many Big Ships May Mean Excess Capacity

Too Many Big Ships May Mean Excess Capacity

Authoritative Drewry Shipping Consultants says that too much emphasis is being placed by the liner shipping industry on the current strength of European-Far East trade lanes. As a result, the global marine consultant firm is seeing a great number of new orders for larger ships.

In its eighth Annual Container Market Review and Forecast 2007/08, Drewry’s supply/demand Index for 2009 anticipates a “weakening of the core trades.” Further, the report cautions the industry to be aware that economic factors may further undermine the balance in 2010, when the first of the newly ordered 10,000 TEU (twenty foot equivalent unit) ships are slated to move into the European-Far East trade.

Neil Dekker, Editor of the Drewrey report, notes, “The industry should remain concerned that the transpacific and transatlantic trades are not performing well. Current weaknesses in the US economy serve as a warning that double-digit demand growth in the transpacific trade is not permanent. Ocean carriers need to remain wary of their costs and the management of the cascading of big ships from the main east/west trades to the smaller north/south trades.”

HKIA: Slowdown in Air Traffic

HKIA: Slowdown in Air Traffic

Passenger volume at Hong Kong International Airport (HKIA) grew 1.3%, to 4.5 million, in July 2008 while cargo throughput rose 0.7%, to 317,000 tonnes. Air traffic movements increased 2.1% from July 2007, to 25,895.

Whilst the overall market slowed down, there were a few bright spots. The small growth in passenger volume was attributable to the increase in transfer traffic related to North American and Australasian destinations while cargo transshipments also helped the growth in cargo throughput. Both cargo import and export recorded declines. July's performance was consistent with latest Airport Authority projections in light of economic uncertainties and the impact of high fuel price on travel and freight demand.

Stanley Hui Hon-chung, Chief Executive Officer of the Airport Authority, said, "Airports and airlines worldwide are feeling the effects of surging fuel prices and economic uncertainties, conditions we expect will likely continue. Airlines have started to reduce flight frequencies to contain losses. As a result, we anticipate a more difficult operating environment and slower growth for all categories of air traffic for the remainder of the year. HKIA will monitor closely changes in the market."

On a rolling twelve-month basis to 31 July 2008, HKIA's air traffic experienced solid growth. Passenger throughput increased 7.3%, to 49.5 million, cargo volume rose 6.5%, to 3.9 million tonnes and air traffic movements climbed 5% to 302,510.

Source: HKIA

American Airlines to Expand Service to Brazil This Fall With the Addition of Three New Destinations

American Airlines to Expand Service to Brazil This Fall With the Addition of Three New Destinations

American Airlines will add three destinations in Brazil to its route network in November, further growing its presence in South America's largest country while expanding its leadership position in flights from the United States to Latin America.

American, a founding member of the global oneworld(R) Alliance, will begin serving the cities of Belo Horizonte, Salvador de Bahia, and Recife in Brazil on Nov. 2, all from American's Miami hub.

Service from Miami to both Belo Horizonte and Salvador de Bahia will operate nonstop, with the Salvador de Bahia flight continuing on to Recife and then returning to Miami. The Belo Horizonte flight will operate three days a week. Service to Salvador de Bahia and Recife will operate daily.

American will fly the routes using widebody Boeing 767-300 aircraft configured with 30 seats in Business Class and 195 seats in the Main Cabin.

Belo Horizonte, in southeastern Brazil, is a commercial and industrial center also known for its cultural activities and its general quality of life. Salvador de Bahia, on Brazil's northeast coast, is noted for its cuisine, music and architecture. Recife, also on the northeast coast, boasts a major port, nearby beaches and a vibrant culture and is often called the "Venice of Brazil."

The three new destinations complement American's existing service to Brazil, which includes flights to Sao Paulo from Miami, Dallas/Fort Worth, and New York JFK, and to Rio de Janeiro from Miami. American also operates one- stop service to Rio de Janeiro from New York JFK.

"American is excited to offer our customers more of Brazil," said Peter J. Dolara, American's Senior Vice President - Miami, Caribbean and Latin America. "It is a dynamic country in so many ways, and American's comprehensive schedule of service to its leading business, leisure and cultural centers puts it all conveniently and easily within reach."

American's hub in Miami offers travelers convenient connections to Belo Horizonte, Salvador de Bahia and Recife from dozens of cities throughout North America and Europe.

With the addition of the three Brazilian cities to American's network, American will offer customers 27 destinations throughout Latin America -- more than any other U.S. airline.

Travelers can check schedules and fares and book flights to Brazil from any American Airlines or American Eagle destination by visiting On you'll find the absolute lowest fares available for American Airlines, American Eagle and AmericanConnection(R) flights -- guaranteed. For full details on the Lowest Fare Guarantee, visit

Source: American Airlines

Wednesday, August 20, 2008

Shipping Firms Eye Link Between India, Europe

Shipping Firms Eye Link Between India, Europe

Container shipping firms are starting new direct services from India to Europe to take advantage of strong demand for exporting merchandise to the continent. Port Facing capacity constraints at the Jawaharlal Nehru Port of call: (above) in Navi Mumbai, firms are now turning to Mundra in Gujarat. (Photograph by Ashesh Shah/ MINT) Islamic Republic of Iran Shipping Line (IRISL) has launched a new Indian subcontinent/Europe weekly direct service by linking Mundra Port in Gujarat with European destinations such as Felixstowe in the UK, Hamburg in Germany, Antwerp in Belgium and Le Havre in France.

The Europe container line (ECL) service will take 19 days to ship goods from Mundra to Felixstowe, the first northern Europe port of call on the service. The ECL service made its first call at the container terminal run by the Adani Group in Mundra Port on Wednesday.

“The market is looking bright for Europe,” said Makarand Sardesai, vice-president of operations at Zim Integrated Shipping Services (India) Pvt. Ltd, which operates a weekly direct service from Jawaharlal Nehru Port, or JN Port, in Navi Mumbai, Maharashtra, to European ports in partnership with state-run Shipping Corp. of India Ltd, Kawasaki Kisen Kaisha Ltd, or K Line, and Malaysia International Shipping Corp. Bhd.

India ships about 12,000 twenty-foot equivalent units, or TEUs, a week or 624,000 TEUs a year to European customers. A TEU is the standard size of a container and a common measure of capacity in the container shipping business. Other firms that operate in this sector include Denmark-based Maersk Line, the world’s biggest container shipping company, and its subsidiary Safmarine, CSAV of Chile, Hapag-LloydAG and Hamburg Süd of Germany, Switzerland-based Mediterranean Shipping Co.SA, CMA CGM of France and its unit ANL Container Line. It costs around $1,600 (Rs67,200) to ship a standard cargo container from India to Europe.

The second container terminal at Mundra Port, run by the Adanis, started commercial operations in December with a capacity to handle 1.25 million TEUs a year. The terminal currently handles close to 200,000 TEUs. The other container handling facility at Mundra Port is run by DP World, the world’s fourth biggest container port operator, owned by the Dubai government. The DP World terminal handled 711,549 TEUs in the 12 months to March.

A few years ago, IRISL operated a direct weekly service to Europe from JN Port, but this service was withdrawn because of congestion at India’s busiest container handling port.

“While JN Port is facing capacity constraints, Mundra Port has spare capacity for handling containers, ” said Sandeep Mehta, chief executive officer of Mundra Port and Special Economic Zone Ltd.

Source : LiveMint, 8 August 2008

Tuesday, August 19, 2008

Exporters Need More Shipping Containers

Exporters Need More Shipping Containers

At ports, a shortage of cargo containers seems about as unlikely as cardboard boxes suddenly becoming obsolete. The weak dollar has made U.S. goods cheaper overseas and has created a new wrinkle for the shipping industry: Containers are increasingly hard to come by. “The import volume has slowed down, so fewer boxes are coming in, and exporters are seeing more demand,” said Kevin Mack, a vice president at Newark, N.J.-based Columbia Containers. “I’ve been in the business for 25 years, and this is the first time I can remember this happening.”

While most containers come into ports on the East Coast, the Midwest can’t find enough of them to handle the rising exports of grains, soybeans and corn bound for overseas markets.

“It’s all logistics,” said Sherif Gendi, who arranges U.S. grain exports for the trading company Marubeni America in New York City. “The containers,” he said, “aren’t getting to where they’re needed.” That’s because moving empty containers around is an expense no one wants to absorb.

When a company adds fuel surcharges to the expense of moving an empty container, it becomes a “serious cost,” said Joe Alagna, an executive with China Shipping. On average, the cost of taking an empty container for a one-way ride to Chicago could be more than $1,000.

“The prevailing theory is that by the time you pay to move the empty to the Midwest, it’s a loss,” he said. The supply problem in the Midwest has left giant food processors, trading companies and shippers scrambling to fulfill delivery schedules. And once they succeed in finding containers, exporters still have to secure space on outgoing ships, which also is getting more difficult as export levels climb.

“Virtually every space on every ship is full,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition in Washington. “It’s a real crisis, because only so much disruption can occur before customers start looking somewhere else.”

Philip Damas, head of container research at Drewry Shipping Consultants in London, said the situation is forcing Midwest exporters to plan as much as six weeks out to ensure they have both the containers and the ship capacity necessary to transport their products.

In some cases, exporters are taking drastic steps, warehousing their goods until they can get containers, reserving more containers than they need and moving their goods hundreds of miles by rail to ports with available containers. “It’s getting very expensive, and it’s slowing down the export process,” Damas said.  At the same time, containers aren’t coming into the United States at the same volume they were a few years ago. The weak U.S. economy has led to a slowdown of imports, requiring fewer containers.

The Midwest’s hunt for containers has led plenty of exporters to send goods — such as corn and soybeans — in rail cars, where they’re then moved into containers. Ultimately, some industry experts think the search for containers could lead shippers to the container depots, where boxes piled up as the nation was flooded with more imports than exports.

Source : The State (31 July 2008)

Shipping Lines Told to Stop Fixing Unfair Surcharges

Shipping Lines Told to Stop Fixing Unfair Surcharges

Shipping lines need to work with shippers on fair arrangements for freight charges under the higher fuel cost environment, according to shipper Alami group of companies. "They (shippers) would like to ask the shipping lines not to use the high prices as an excuse for unilaterally imposing hefty increases in the freight charges and surcharges," said its chief executive officer Mohamad Radwan Alami.

He said this in his paper entitled "A Shippers Perspective on Rising Transportation Cost of Goods" at a seminar themed "High Oil Price and its Impact on the Shipping Industry: Staying Afloat in A Sea of Challenge", organised by the Maritime Institute of Malaysia (MIMA) here Wednesday.

In the past, shipping lines, working as a cartel, arbitrarily fixed high rates and unilaterally imposed unfair surcharges, Mohamad Radwan said. "The shippers have long suffered from these practices, which were protected by immunity to the European Community competition law, which was enacted to prevent anti-competitive practices," he said.

However, Mohamad Radwan told the seminar participants that the European Union Commission has since revoked this immunity and given shipping lines until October this year to scrap such practices.

I believe the shipping lines should relook their strategies and build a relationship with shippers that are more fair and just-in a scenario where both parties work as partners," he said.

"Shippers will not benefit from a decline in the growth of the shipping industry as they need the services to move their products," he added. Mohamad Radwan, who is also the logistics committee chairman of the Federation of Malaysian Manufacturers (FMM), said with higher operating costs and expected slowdown in world trade, the available capacity could surpass demand. "Shippers, being traders, will generally offer fair deals to shipping lines when they find them reliable and holding on their commitments and thus enable shippers to execute shipments to their customers according to plan and to avoid disruptions," he said.

On the basis of cooperation and mutual understanding, shippers and shipping lines had in the past worked out arrangements that was fair to both parties and sustained a mutually beneficial relationship, Mohamad Radwan said.

"We feel that this attitude of working closely to structure deals that is mutually beneficial is needed now more than ever before and we urge shipping lines to work along these lines," he said.

Mohamad Radwan, the founder of Alami, initiated the group's move in 2003 to establish a state-of-the-art factory for the manufacture of palm oil-based products, with a rated capacity of 20,000 metric tonnes per month.-Bernama

Source : Daily Express, 7 August 2008

Monday, August 18, 2008

SIA's Load Factor Falls For Seventh Consecutive Month

SIA's Load Factor Falls For Seventh Consecutive Month

Singapore Airlines (SIA) has suffered year-on-year load factor reductions in every month of 2008, the latest a 1.1 percentage point fall in Jul-08.

Capacity growth in 2008 has been strong for SIA, with a further 8.2% year-on-year expansion in Jul-08. While this is great news for Changi Airport, airline yields could be suffering, as demand growth fails to keep up with aggressive capacity expansion.

The delivery of a number of new aircraft to SIA in recent months has resulted in extra frequencies to Europe (Moscow, Manchester, Zurich, Paris, Milan and Barcelona), Southwest Pacific (Sydney, Brisbane and Auckland), East Asia (Ho Chi Minh City and Bangkok), Americas (Houston) and West Asia & Africa (Delhi, Chennai, Bangalore and Dubai). The deployment of the larger A380, in place of the B747-400s, on the London, Sydney and Tokyo routes also contributed to the capacity increase, according to SIA.

The airline reported passenger load factors for the East Asia and West Asia/Africa route regions fell, “due to new capacity introduced to these regions not yet being fully met by traffic growth”. China traffic has been affected by the "stringent visa restrictions for travel into China and the curb on travel from China prior to the Beijing Olympics", according to SIA.

SIA stated that passenger load factors in the Americas route region declined sharply by 5.5 percentage points in Jul-08, off a very high base, amid some signs of a softening in the leisure markets from the USA.

As reported in last Wednesday’s edition of Asia Pacific Airline Daily (13-Aug-08), “as new aircraft deliveries continue to flow into the fleets of Asia’s airlines they have two choices; grow, or ground older aircraft. Growth – rather than replacement – is quickly becoming the order of the day. Relief in the form of falling fuel prices will intensify this trend”.

A factor driving the build-up in capacity by SIA and its rival Asian hub carrier, Cathay Pacific, is a defensive play against the fast-growing Middle East airlines and their hubs. As a proportion of total fleet orders in the Boeing and Airbus order books, Middle East carriers now account for 13% of the total.

But as a proportion of widebody order books - an indicator of future international market dominance - Middle East carriers account for 25% of the total, with 524 orders (led by Emirates, Etihad and Qatar Airways), against 763 orders for the entire Asia Pacific region - and significantly more than Europe or North America.

Traffic and load factor performances may fluctuate from month to month – but they form part of major strategic changes that are washing through the airline industry.

Copyright. © Centre for Asia Pacific Aviation

Indonesia Custom Office Has Dis-qualified 2,000 Custom Brokerage Companies

Indonesia Custom Office Has Dis-qualified 2,000 Custom Brokerage Companies

Within a year the Indonesia Custom Office has dis-qualified 2,000 custom brokerage companies (PPJK) which operate in Indonesia due to devious business practice.

“We put emphasis on compliance and transparency," as quoted by Mr. Anwar Supriyadi, Director General of Custom in Jakarta on Tuesday (12/8/08).

This has reduced the number of company offering custom services (PPJK) from 5,,000 to 3,000. In return, Anwar said, services in ports are expected to be more affluent.

Furthermore, Custom Office has also dis-qualified 1,000 importing companies with the same reason. Thus making operable importing company to 14.000 currently.

“This in support to companies who have shown compliances and transparency. “We also expect existing operating company to improve their compliance to recent rules and regulation applied in Custom Office”, Anwar said.

No improvement in mind-set

The recent site inspection by Anti-Corroption Commission to Custom Office of Tanjung Priok on May 2008, has failed to improved the mind-set and attitude in Custom’s officials.

Confirmation on that is seen on the recent inspection to Custom Office in Juanda Airport, 2 weeks after Tanjung Priok.

Anwar said, the Custom inspection team has found Rp.128 million of bribe money scattered in a number of envelopes.

“Two Custom Officers were caught breaching Office Ethic Code, and one has been terminated”. “This showed there are still inconsistency among Custom officer”, Anwar quoted.

In addition to the Tanjung Priok and Juanda case, 8 Custom Officer has also discharged for various reason in 2008.

At this time, Custom Office of Batam is also under scrutiny for breaching of Ethic Code by their officers.

Bambang Soesatyio, Chief of Moneter and Fiscal from the Indonesia Trading House said, if The Custom Office is serious on improving investment in Custom area, they must also put order among themselves.

Custom Service Company is not acting alone, their mischievous behavior reflect similar attitude from the Custom Officer, said Bambang.

“This strict action may also lead to a reduced of smuggling activity thus help the local market to gromw”, Bambang quoted.

Source : Kompas Daily, 12/08/2008

Thursday, August 14, 2008

UPDATE 2-Shipping Line NOL Faces Profit Squeeze Amid Hapag Bid

UPDATE 2-Shipping Line NOL Faces Profit Squeeze Amid Hapag Bid

Neptune Orient Lines said it could finance a multi-billion dollar bid for rival Hapag-Lloyd, in spite of a 19 percent profit fall due to higher costs and tougher conditions which prompted investors to dump its shares.

NOL management said its strong balance sheet allowed it to pursue a big acquisition, but had no comment on the specifics of last month's bid for the German group, which was put up for sale by its parent TUI (TUIGn.DE: Quote, Profile, Research, Stock Buzz).

Analysts estimate the group could be worth $7 billion, more than twice NOL's $2.9 billion stock market value. A deal would create the world's third-biggest container shipping group.

The Financial Times Deutschland reported on Thursday that NOL and a Hamburg-based consortium had qualified for a second round of bidding after two unidentified parties dropped out. It said the two remaining groups would now take a closer look at Hapag.

"Due diligence has started this week," the newspaper quoted an anonymous source close to the talks as saying.

Speaking to journalists and analysts at a briefing, Chief Executive Ron Widdows declined to comment on the bid, but NOL said in a statement that it will invest to improve its shipping business.

NOL (NEPS.SI: Quote, Profile, Research, Stock Buzz), 66 percent-owned by Singapore sovereign fund Temasek [TEM.UL], said its net profit for the April-June period fell 19 percent to $76 million, from $93 million a year earlier.

NOL shares hit an 18-month low on the news, dropping more than 8 percent. The stock recouped some of the losses and was 6.9 percent lower at S$2.56 by 0256 GMT.


In June, banking sources told Reuters that the Singapore state-controlled group was looking to raise $5-$7 billion in loans to finance a bid.

Widdows, in his first public appearance as CEO since his predecessor Thomas Held abruptly left the group last month, stressed the long-term benefits of a Hapag-Lloyd purchase even as analysts expect the outlook for container shipping to darken further due to a weakening economy.

Trade between Asia and Europe is slowing, compounding already weakening trade between Asia and the United States. (See [ID:nHKG306993] for a story on Asia's exports)

"NOL management, who have been one of the more bullish voices in container shipping, have turned increasingly cautious on the outlook and pointed out a rebound in 2009 is uncertain," said JPMorgan analyst Johnson Man Leung.

Quarterly revenues rose 24 percent to $2.24 billion, but costs rose faster, up 28 percent at $1.96 billion.

"The second quarter was impacted by a large run up in bunker costs and a deterioration in core rate levels in the Asia-Europe trade," CEO Widdows said.

The price of ship fuel traded in Singapore BK380-B-SIN has risen 43 percent since the start of the year to $682 a tonne.

NOL is expected to report a 7.6 percent drop in full-year 2008 net profit to $483.29 million, down from $522.76 million the year before, according to the average of forecasts from 11 analysts polled by Reuters Estimates before Thursday's results. (Additional reporting by Charmian Kok) (Editing by Kim Coghill).

SINGAPORE, Aug 7 (Reuters)

Market Rate ex. Jakarta/Surabaya to Europe

Market Rate ex. Jakarta/Surabaya to Europe

Inorder to comply with market trend for EU trade, we are now promoting our very competitive rates for your perusal.

POL :  Jakarta / Surabaya

Destination :

(Hamburg/Rotterdam/Zeebruge/Antwerp/Lehavre ):

US$ 1,750/d20' | US$ 3,150/d40' | US$ 3,350/d40'HQ  

(Fos Sur Mer/Barcelona/Valencia/Genoa/Taranto ):

US$ 1,775/d20' | US$ 3,175/d40' | US$ 3,375/d40'HQ

(Alexandria/Port Said/Damietta ):

US$ 1,975/d20' | US$ 3,500/d40'  | US$ 3,750/d40'HQ


US$ 1,900/d20' | US$ 3,450/d40' | US$ 3.650/d40'HQ

(Piraeus/Thessaloniki) :

US$ 2.100/d20' | US$ 3,800/d40' |US$ 4,000/d40'HQ  à subject to Congestion Surcharge USD 150/teu

(Haifa/Ashdod) : US$ 2,300/d20' | US$ 4,050/d40' | US$ 4,250)

Black Sea Ports (Varna/Constanta/Illichevsk/Odessa/Beirut /Limassol)

US$ 2,400/d20' | US$ 4,300/d40' | US$ 4,500/d40'HQ  

Remarks :

- Valid for Prepaid basis only

- Above rates are subject to Doc fee (IDR.100.000)

- Subject to all aplicable surcharges at POD

- Valid until end of August 2008

- Accepting cargo from PoL : Semarang / Palembang / Panjang / Belawan / Makassar / Banjarmasin

- Also accepting cargo to Europe main cities / ports

Any inquiries please kindly contact/send email to :

Wednesday, August 13, 2008

Outsourcing Without Fear

Outsourcing Without Fear

A strong 3PL-client relationship can take the risk out of outsourcing.

TMSi's Ron Cain identifies the perceived risks of outsourcing and counters them with solutions that guide a company through the development of a respectful and successful 3PL relationship.

The thought of outsourcing can be a concern for any business. Companies and their CEOs have often achieved success through meticulous attention to detail and extensive control over every aspect of business operations. Many companies take the "if it ain't broke, don't fix it" approach, assuming that their internal operations are good enough and improving them isn't worth the perceived risk of outsourcing.

Outsourcing, defined by Rob Handfield of N.C. State University as "the strategic use of outside resources to perform activities traditionally handled by internal staff and resources", often has the connotation of a loss of control, transparency, and security for CEOs and operations managers - a reputation that has been perpetuated by poor outsourcing providers and bad 3PL contracts. Find the right partnership with the right 3PL, however, and you can be free to outsource without fear.

Everyday life is full of examples of outsourcing, from housekeeping to vehicle maintenance. These simple examples show that outsourcing is not as intimidating as it sounds. The criteria to that should be used when considering if outsourcing is right for your company includes:
1. Is the task highly complex?
2. Is there a risk to the business while performing the task in house?
3. Does the task require more than the available resources?
4. Does the task require highly specialised training or tools?
5. Is the task outside of your core competencies?
6. Could outsourcing cut costs and improve service levels?

More and more companies are asking these questions and drawing the same conclusions: it's time to outsource.

According to a study by Georgia Tech University and Capgemini, transportation and warehousing continue to be the functions most commonly and successfully executed through outsourcing. Other frequently outsourced functions include customs clearing and brokerage, forwarding, shipment consolidation, reverse logistics, cross-docking, and many others.

The trend towards outsourcing is steadily increasing, as the study reports that 50% of businesses that currently do not outsource logistics plan to outsource at least some of their operations in the future. The report also found that in the last four years of the study, 80% of companies were using 3PL services, an increase of almost 10% from the first six years.

There are several factors that allow companies to outsource without fear. Creating strong personal relationships on an operational level, and having carefully drafted and signed contracts, have been cited as two of the most important elements in a successful outsourcing plan. A 3PL-client contract should include detailed descriptions of services, performance tracking criteria, clearly measured improvements in service levels, peer-to-peer relationships that provide guidance and sponsorship, and clearly measured cost reductions.

With the right 3PL partner, an outsourcing plan can have significant results: companies who outsource reported an average reduction of 18% in fixed logistics assets, a savings of 13% on logistics cost, and a reduction in the average order cycle length of almost four full days.

Once the decision to outsource has been made, a company must find the right 3PL that reflects its culture and values, and is able to enter into a productive relationship.

First, a company should decide whether its needs are best suited by an asset-based or non-asset-based 3PL. An asset-based 3PL is owns many or all of the assets necessary to run its clients' supply chains. This allows the provider to leverage internal strengths and infrastructures to provide direct, immediate solutions. However, an asset-based 3PL may be internally focused rather than customer focused, can have internal biases, or may falsely overemphasise its flexibility. Also, a customer will often pay for all or part of the assets, resources, and tools owned by an asset-based 3PL.

A non-asset-based logistics provider does not own the assets to manage the supply chain, which means the 3PL is not limited to one infrastructure of assets, allowing for more creative alternatives. A non-asset-based 3PL also possesses greater objectivity and typically delivers better ROI, since more capital is available and they do not need to realise value from an inventory of assets. However, with more pieces to manage, it is imperative that a non-asset-based 3PL has the experience necessary to negotiate effective contracts and realise sources of improvement in every aspect of the supply chain.

Other important factors to keep in mind when selecting a 3PL include commitment to quality, price, references and reputation, flexibility of contract terms, resources, value-added capability, culture, location, and existing relationships.

There are several ways to determine if a 3PL is right for your company. One effective method is to send out both formal and informal/blind Requests for Information (RFIs), followed by Requests for Proposals (RFPs) to those vendors whose RFIs met your established goals and criteria. After evaluating all RFP responses, you should perform as many site visits as possible and begin conducting negotiations with multiple vendors. When the best-suited vendor is found, the contract or partnership can be awarded, and both sides should commit resources to the success of the relationship.

Despite a company's best efforts, not all 3PL relationships are the right fit, and it is important to be aware of the warning signs. Statements like "the 3PL is on its own" show an absence of trust and respect, and a lack of communication that can cause a 3PL-client relationship to fail if not addressed. Other indications that a 3PL relationship has soured is an absence of cost-out and continuous improvement, one or both parties constantly referring to the contract, or no time spent evaluating productivity and success. When this is the case, the relationship must be seriously evaluated and reworked, or a new 3PL selected that is more in line with the customer's culture, goals, and expectations.


Outsourcing is often perceived as complex and error-prone, which indeed it can be unless a strong, respectful 3PL relationship is established. Such a relationship will only be as good as each side makes it, and it should be treated as an equal partnership.

A good 3PL relationship should create a performance-based culture and workforce that conveys high expectations and implements incentives that drive behaviours. By investing in continuous improvement in time and capital, maintaining the lines of communication through a quarterly meeting rhythm (not just when there are problems), thinking right to left by always keeping the end state in mind, and remembering that every business has an Achilles' heel that just needs to be found, a company can feel in control, safe, and secure with its decision to outsource.

Every outsourcing decision becomes a statistic - decide what kind of statistic you want your outsourcing to be, and find the right 3PL relationship to get you there!

Tuesday, August 12, 2008

NOL Group Appoints New President of APL Unit

NOL Group Appoints New President of APL Unit

NOL has appointed Mr Eng Aik Meng as President of its APL container shipping unit. Eng will rejoin the company, having previously served with NOL in a variety of roles from 1993 to 2007.

Eng is currently Deputy Chief Executive Officer of Singapore-headquartered diversified shipping and industrial supply chain company IMC Corp Group. Concurrently, he is also Managing Director of its Aurora Tankers business.

Mr Eng was Senior Vice President of APL's Intra-Asia business from 2002 to 2007. During this period APL grew its position in the Intra-Asia trades substantially, doubling revenues and establishing a leading market position in the sector.

In earlier roles, Eng headed NOL’s Strategic Planning group and held various positions in corporate finance. He has been involved in merger and acquisition activities, organizational restructuring and business development projects in both NOL and IMC. Eng played an important role in the integration of NOL and APL following the 1997 merger of the two companies.

In heading up the APL business, he will succeed Mr Ron Widdows, who was appointed NOL Group President and CEO on 7 July, 2008. Widdows said: "Aik Meng has a deep knowledge of APL’s business and its customers. We have worked together closely over many years and I am confident Aik Meng will provide strong leadership for APL and bring valuable skills to NOL's senior management team."

Eng holds an MBA from Harvard University, USA and a Bachelor of Accountancy (Honors) degree from the Nanyang Technological University, Singapore.

Logistics Asia - Industry News, 12/8/2008