SEA FREIGHT Long-running deal continues for Decathlon Thailand
Maersk Logistics is to extend its service contract with Decathlon Thailand for another two years.
Since January 2006, Maersk Logistics has been working with Decathlon Thailand to create and deliver improvements from within the vendor’s supply chain management. This has led to successful business objectives, which were monitored through customer satisfaction surveys.
“In demonstrating our commitment to providing continuous improvement for Decathlon Thailand, we presented a number of innovative initiatives that would further benefit our customer. Of course, in such a challenging economic environment, Decathlon Thailand was pleased with our approach to extract efficiencies and bottom line support”, said Khun Ruengrit Chaiwiwat, Assistant General Manager, Import Export Logistics
Over the next two years, Maersk Logistics will focus on service excellence in areas such as Documentation Accuracy and Lead-time, Container Utilization and General Terms for Delivery – critical aspects of the KPIs agreed by both parties. In addition, Maersk Logistics team will continue to monitor regular service feedback from Decathlon Thailand so that staff knowledge and engagement with the customer’s business remains high.
Applying its global industry knowledge with local market insight, Maersk Logistics presents itself as a business partner to customers like Decathlon Thailand and highlights areas where there are potential for improvements.
Asian-Euro shipping rates rise
German shipping line Hapag-Lloyd is to increase rates on the Asia-to-Europe trade route by US$500 per TEU in June and add a peak-season surcharge.
The Hamburg-based carrier said the rate increase would apply on services from the Far East to northern Europe and the western Mediterranean from 15 June.
On the eastbound leg, rates will increase by $150 per TEU from 15 June, while services between Asia and the western Mediterranean will increase by $300 from 1 August.
The peak season surcharge of $150 per TEU will apply from 1 August.
Hapag-Lloyd said it would increase its rates up to $1,000 per TEU on the westbound leg, and $250 on the eastbound leg, including surcharges, from April.
MOL installs improved auto-monitoring system
Mitsui OSK Lines has installed an automatic monitoring system for reefer containers at the Tokyo International Container Terminal (TICT).
The system automatically monitors the temperature in each reefer container and transmits information from modems on containers to monitors in the terminal office. The signals travel over the same power lines that supply electricity to the reefer containers.
Until now, the temperature in the reefer container was controlled by connecting a special cable for monitoring or by periodic visual checks. Previous monitoring systems using power lines were subject to interference from the surrounding environment, preventing wide acceptance. But tests proved that the new system is not affected by interference, and provides accurate, real-time information.
MOL plans to install the reefer container auto monitoring system at the other container terminals it operates in Japan and overseas.
NYK Logistics expands healthcare
Facing increasing demand for healthcare services, NYK Logistics North Continent has doubled its Good Distribution Practices (GDP) licensed area within its Antwerp warehouse.
Several healthcare sector companies have recently outsourced their logistics activities to NYK Logistics, resulting in an expansion of the existing 4,000 m2 GDP licensed zone with an additional 4,500 m2.
The licensed area offers full humidity monitoring and control, together with different temperature ranges both for cooled and ambient storage (ranging from 2OC to 25OC).
NYK offers GDP-licensed warehouse space and temperature-controlled supply chains from factories located outside the EU to any destination in Europe.
Services offered to customers in the medical devices, pharmaceuticals and over-the-counter sectors are performed under stringent GDP legislation and under ISO 14001 certification together with NYK Logistics’ Quality Management System.
Asian lines see stormy times continuing
Asia’s leading container lines is predicting more trauma as the financial pressure caused by over-capacity and low demand on key trade lanes shows no sign of respite.
Quarterly and full-year results released revealed a container shipping industry hemorrhaging cash as volumes, average revenues and profits declined through March.
Japan’s K Line group saw consolidated net income for the year ended 31 March fall Yen50.6 bn (US$520 m) to Yen32.4 bn due to a decrease in cargo movements and it predicted further declines in 2009.
NYK saw operating income from its liner activities contract 35.9% as the division posted a loss of Yen24.3bn in FY 2008.
Singapore-based NOL admitted that its container line, APL, had seen volumes contract by almost 30% in the first quarter of 2009 and forecast a loss of $240m over the period.
Japan’s Mitsui OSK Lines saw group profits fall over 33.3% year-on-year to Yen127bn in FY 2008. Trade volumes on Asia-North America eastbound routes fell 10% in the period, while freight rates declined by 40% on Asia-Europe westbound routes.
Sea freight growth outpacing shipowners
According to Dr Thomas Lieb, chairman of Schenker’s management board, the market share of sea freight forwarders is growing faster than that of the shipowners.
Speaking to delegates at the CI Global Liner Shipping 09 conference, Lieb explained the factors that he believes will continue to be crucial for the success of the ocean freight market, not only in difficult economic conditions.
“Over the past four years, the market share of the top four container shipping companies has grown by 4.3%. During that same period, the market share of the top four ocean freight providers grew by 18.8%.” Lieb added that he therefore believes that major logistics companies will play an increasingly important role in future. On the whole, however, the ocean freight market is highly fragmented.
By constantly developing and expanding the supply chain, integrated logistics services providers create significant added value for carriers and customers, continued Lieb.
Singapore Airlines launches South America link
Singapore Airlines has begun regular cargo flights to South America to target demand for connections to the region from Asia and Europe.
It recently opened a westbound route from Singapore to the region with a stop at its European hub in Brussels to capitalise on the Europe-South America traffic.
The route is Singapore-Dhaka-Sharjah-Brussels-S?o Paulo-Quito-Bogota-Bridgetown-Brussels-Sharjah and Singapore and would be flown using a B747-400F carrying high-tech goods in and perishables out.
Lufthansa Cargo adds African locations
Lufthansa Cargo has added seven new African destinations to its network in co-operation with Kenya-based carrier Astral Aviation.
Under the agreement, Lufthansa Cargo MD11 freighters will fly to Nairobi from where cargo will be distributed to five other African states on freighters operated by Astral Aviation.
The Kenyan airline operates weekly flights to Bujumbura in Burundi and Dar Es Salaam in Tanzania, with connections to Mwanza in Tanzania and Juba in Sudan, and a weekly flight to Zanzibar in Tanzania.
Astral Aviation operates a fleet of DC9 and Fokker 27 freighters as well as Antonov 12 and Cessna Caravan aircraft from its dual hubs at Jomo Kenyatta International Airport in Nairobi and the Lokichoggio airport in northern Kenya.
The agreement with Lufthansa follows a similar agreement between Astral and Etihad Crystal Cargo that was signed last month.
New services from Cargolux and Emirates
Cargolux has started a new weekly B747-400 freighter service to Toronto/Ontario.
The flight departs Luxembourg on Sundays at 1805 and arrives in Toronto at 01h45 on Monday. The return flight departs Toronto at 0345, flying via Prestwick to arrive in Luxembourg at 19h30 on Monday.
This new scheduled service provides important main deck trans-Atlantic capacity, particularly for oversize pieces. It also offers new possibilities for the transportation of dangerous goods that can only be carried aboard cargo aircraft.
Cargolux has served Eastern Canada since 1995. Apart from the new service to Toronto/Ontario, Cargolux serves Calgary/Alberta twice a week.
With Emirates’ launch of flights to Luanda, Angola in August and to Durban, South Africa in October, Emirates SkyCargo will provide up to twelve tonnes of cargo capacity in the bellyhold of each aircraft
Beginning on August 2, the Dubai – Luanda service will operate three times a week.
Flights to Durban will start on October 1st.
Air Traffic Continues to Nosedive
Hong Kong International Airport (HKIA) managed a total of 3.9 million passengers and 268,000 tonnes of cargo in March 2009, representing decreases of 7.9% and 19.8% respectively from the corresponding month in 2008. Year-on-year, air traffic movements contracted by 7.5% to 23,805.
Passenger traffic of Hong Kong residents experienced a yearly decline of 15% during this month, mainly due to the busy outbound travel period around the Easter Holidays falling in April this year as opposed to March in 2008. Visitor traffic to and from Hong Kong also dropped 9% as economic downturn continued to affect business and leisure travel. Long-haul markets such as North America and Europe, as well as regional markets including North Asia and Taiwan, were hit hardest.
The majority of HKIA’s major markets continued to record double-digit decreases for cargo throughput during March, resulting in the airport’s export tonnage reducing by approximately 25% as key markets such as North America, Southeast Asia and Taiwan registered a significant yearly decline of over 30%. Imports also dropped around 17% while transshipments fell around 9% year-on-year.
Cumulative figures for the first three months recorded a 7.1% reduction in passenger number to 11.3 million. Cargo volume was also down 22.8% to 676,000 tonnes, while air traffic movements slid 6.6% to 69,285.
For the twelve-month period between April 2008 and March 2009, HKIA handled a total of 47.7 million passengers, 3.4 million tonnes of cargo and 296,230 flight movements.
TNT launches S$20m hub in Singapore
TNT has officially opened its expanded and re-modelled regional hub at the Changi Cargo Complex in Singapore.
The S$20 million hub will serve as the company’s nerve centre for Asia, and will significantly increase the capacity for time-sensitive freight passing through Singapore.
TNT’s regional hub is Singapore’s first integrated air and road hub. Capable of handling up to 350 tons of cargo a day, the 7,334 m2 facility is located next to the cargo apron at the Singapore Changi Airport and further enhances TNT’s international airfreight services between Europe, Southeast Asia and China.
The new expanded facility also links TNT’s air services directly to the company’s 5,000 mile Asia Road Network (ARN), which stretches across 125 cities in Singapore, Malaysia, Thailand, Indochina (including Vietnam) and China.
UPS sees earnings fall despite market growth
UPS has reported first quarter revenue dropped 13.7% compared with the prior year period.
The company continues to make strategic investments such as expanding its Worldport facility, building a new air hub in Shenzhen, China, and opening new healthcare distribution facilities in Europe and Puerto Rico. However, it is scaling back 2009 capital spending by an additional $200 million, bringing the total to just below $2 billion.
Consolidated operating profit for Q1 2009 was $718 million, (Q1 2008: $1.49bn) on revenue of $10.9 billion (Q1 2008: $12.7bn).
During the first quarter, UPS expanded its guaranteed early morning delivery territory in the US, began a new flexible returns program. It also took an impairment charge on its entire fleet of 44 DC-8 aircraft, which reduced net income by $116 million.
All business units in the Supply Chain & Freight segment recorded revenue declines, with UPS Freight posting declines in revenue, shipments and tonnage compared to Q1 2008. However, the Logistics business continued to benefit from UPS’s investment in the healthcare sector.
According to chief financial officer Kurt Kuehn, economic indicators show that with recovery in the US not likely to start much before 2010.
DHL opens Express gateway at Incheon International Airport
DHL has opened its US$50 million DHL Express Incheon Gateway, located within the free trade area of Incheon International Airport.
The 20,000 m2 facility is more than five times larger than the previous facility in Incheon International Airport.
The DHL Express Incheon Gateway will serve as a consolidation and distribution centre from South Korea to markets such as Mongolia, northern China and the Russian Far East.
It will strengthen the intercontinental and inter-regional service connecting South Korea with the US and Europe.
Dan McHugh, CEO of DHL Express Asia Pacific, said that the company’s international express volumes in South Korea increased by more than 50% between 2004 and 2008, and DHL expects this growth momentum to continue.
According to Incheon International Airport Corp, the airport has seen a steady increase in air cargo, and is projecting a 67% rise in its handling capability, from 2.7 million tonnes in 2005 to 4.5 million tonnes by 2010.
Furthermore, the Incheon gateway houses a 24/7 Quality Control Centre (QCC) that is equipped with the Quality Shipment Monitoring System (QSMS), a global shipment management system that enables DHL to monitor shipments in real-time and alerts analysts at DHL hubs, gateways and service centres.
Global airfreight low but stable, says IATA
According to the International Air Transport Association (IATA), air cargo demand was relatively stable in March, although at the shockingly low level of -21.4% compared with March 2008.
“For the fourth consecutive month, international cargo demand is hovering in the -21% to -24% region as a result of the sharp drop in world trade,” said IATA director general & CEO Giovanni Bisignani. “It’s not the end of the recession, but we may have found the floor.”
The severity of airfreight slump is partially driven by manufacturers seeking to correct large inventory overhangs that emerged in late-2008. The stabilisation of the inventory-to-sales ratio has in turn stabilised airfreight demand. Recovery, however, depends on purchasing that can deplete the inventory overhang. Inventory levels remain high and final demand is weak.
In terms of market share, the Asia Pacific region accounted for 43.6% of the global freight volumes. Europe accounted for 27.2%, North America for 16%, the Middle East for 10.2%, Latin America for 2.2% and Africa for 0.9%.
Bisignani pointed out that airlines face many challenges. “Like the rest of the economy, recovery in the air transport sector rests on a rise in consumer confidence and consumer spending. Shedding debt will be a major headwind.”
Global container volumes continue to dip
Container throughput at various ports continues to decline, with only three of China’s Top 10 ports showing a negligible increase in volumes.
China’s biggest port in terms of volumes – Shanghai – handled 5.61 million TEU in the period January – March 2009, down 15% compared with same period last year.
Throughput for Shenzhen (3.88 million TEU) and Guagngzhou (2,15 million TEU) were down 21% and 24% respectively.
Ningbo-Zhoushan, Xiamen, Dalian and Lianyungang also reported volumes declines of between 2% and 10%, although volumes for Qingdao, Tianjin and Yingkou were up 2%, 1% and 9% respectively compared with the first three months of 2008.
By comparison, the Port of Los Angeles handled 1.53 million TEU in the first quarter of this year, down 17.43%.
The Port of Rotterdam handled 2.25 million TEU in Q1 2009, down 16% compared with 2.68 million TEU during the same period last year, and the Port of Antwerp handled 1.74 million TEU, down 16.3% from 2.07 million TEU in Q1 2008.
Green light for Long Beach’s ‘green’ terminal
The Long Beach Board of Harbour Commissioners has unanimously given the go-ahead to a US$750 million renovation project to transform two aging Port of Long Beach shipping terminals into one of the most environmentally-friendly terminals in the world.
With a significant addition of railroad tracks and built-in environmental technology, the new terminal will double the cargo-moving capacity of the two existing facilities while halving air pollution from operations there.
Construction on the project, which will take ten years to complete, could begin by end-2009.
The Harbour Commission certified the 1,500-page environmental impact report/ study yesterday, and approved the permits and other documents to allow construction to begin.
Construction will be phased in, allowing cargo operations to continue at the Long Beach Container Terminal and California United Terminals.
The project will create a single 345 acre facility by merging the existing terminals and adding 51 acres of land by filling in slips, and will also add 65,000 feet of railroad track, enabling almost one-third of all the cargo at Middle Harbour to be moved by train.
Furthermore, the new green terminal will require that:
* All container cargo vessels will plug into shore-side electricity and turn off their main and auxiliary engines.
* All vessels will adhere to the Port’s Vessel Speed Reduction Program, which will cut their fuel consumption and reduce their exhaust emissions from forty miles offshore.
* All vessels will use clean-burning, low-sulphur fuels in their main and auxiliary engines.
* All cargo-handling equipment at the terminal will be the cleanest available.
* All trucks calling at the terminal will meet the toughest EPA emission standards.
US imports at seven-year low
According to a monthly Port Tracker report from the National Retail Federation and IHS Global Insight, February import cargo volumes at North America’s major retail container ports were the lowest for seven years. The number of containers dropped below the one million mark for the first time in five years. Container numbers began climbing in March and April, but the one million mark won’t be seen again before May, and imports will continue to see significant declines compared with last year – at least through the summer.
Whilst these numbers come during what is traditionally the slowest part of the annual shipping cycle, they do reflect the severity of the current recession and its impact on the retail industry.
However, Jonathan Gold, NRF’s vice president for supply chain & customs policy, said: “The good news is that we’ve already seen the bottom for the year, and month-to-month numbers are already starting to climb. We’re still going to see double-digit declines compared with last year, but the size of the gap is starting to narrow.”
The most recent stats are for February. US ports surveyed1 handled only 847,832 TEU in February, down 20.6% from 1.07 million TEU in January and down 31.3% from 1.23 million TEU in February 2008.
February was the first time container volumes dropped below the one million TEU mark since February 2004, and volumes were the lowest since 818,342 TEU in March 2002. It also marked the twentieth consecutive month of declining volumes.