Congress quiet about relief for struggling airlines.

Finally, in what I can only describe as a rare act of sanity, Congress so far appears to be doing nothing to help the ailing airline industry. Read it here.

Airline workers, retirees and travelers may have thought that with four of the nation's largest airlines now in bankruptcy court, Congress would be rushing to help the beleaguered industry. But a combination of free-market ideology, antipathy to unions and "relief fatigue" has produced a subdued response on Capitol Hill to this week's Chapter 11 filings by Delta Air Lines and Northwest Airlines.

"There is a sense of airline financial relief fatigue among members, who feel that we have already rushed to the well on their behalf with post-Sept. 11 support and it's now up to them," Rep. James Oberstar of Minnesota, the highest-ranking Democrat on the House Transportation Committee, said in an e-mail interview.

It's Official - Deutsche Post is acquiring Exel to the tune of USD 6.7 billion.

Full story here.

In other news related to Deutsche Post, DHL will resume service in areas hit by Katrina.

"Although full recovery will take time, we are pleased that residents in the areas stricken by Hurricane Katrina are returning to their homes and businesses much earlier than expected," said Fred Beljaars, Executive Vice President of Operations for DHL. "As a result, DHL is able to bring its local operations back online, resuming service along the Gulf Coast to support customers who depend on DHL for their shipping needs."

DHL has been assisting with disaster relief since the hurricane struck, but had not resumed normal operations as of yet. This is good news as it means that customers are expected to be coming back to do business very soon. For those of you who don't know, Deutsche Post owns DHL.

U.K. based Transport Intelligence publishes global survey of shippers and forwarders

Another article I read in the September issue of Air Cargo World, the article points out that the survey found that shippers rated "proactive problem notification" as the most important service requirement from a freight provider. I have long contended this point in the industry for years. At the heart of our business is communication. Nothing is more important than maintaining excellent communication among our customers, vendors, and partners. I have often argued that the company that is able to communicate more timely and accurately then their competitors will always be able to steal business away from others.

As a smaller company in the industry, this is the most important key to my company's success. We may not have the largest worldwide network, or able to negotiate low prices with the carriers like our bigger competitors, but the reason we continue to literally snatch customers away from the big boys is because we demonstrate time and time again that we communicate with our shippers better than they do. Most importantly, as this survey suggests, we are extremely proactive in notifying our customers of problems. Rarely do our customers find out about problems before we do. We never shy away from notifying our customers immediately of any and all problems as soon as we know about them.

In this article, the survey goes to point out that while this issue is the most important aspect of the forwarder/shipper relationship, that most shippers rate forwarders poorly in this regard:

John Manners-Bell, chief analyst at Transport Intelligence, points to some
divergent views between perception and performance.

"According to the shippers we surveyed, they rated proactive notification of
problems with a shipment as their most important aspect of customer service from
the forwarder. However, most forwarders were scored by the shippers as 'less
than acceptable' in this key service attribute," he says.

"The gap shows
that there is a clear opportunity for the leading freight forwarders to win
competitive advantage by addressing these issues," says Manners-Bell. "Although
forwarders have to rely to a large extent on the performance of their carriers,
the survey strongly suggests that when things do go wrong they still need to be
more proactive in informing their customers."
He adds, somewhat alarmingly:
"Despite the many millions invested in technology, it also seems that the flow
of information between supply chain partners is still less than optimal."

This is one of my biggest gripes about our industry. We pour billions into technology that is supposed to make communication faster, easier, and more accurate, bringing us closely together. But this has not happened. It does not matter how much you spend on technology if you do not utilize that technology to improve the communication.

But he adds that the air freight forwarding market will continue to remain
highly fragmented with no single player gaining dominant control.
"One of
the reasons for this is the low barriers to market entry and exit," explains
Manners-Bell. "There is still little financial investment required to establish
an 'asset-lite' operation, with personal service a key competitive advantage in
the eyes of many shippers. Smaller operators can provide (personal
service) equally well, if not better than, their larger rivals."

For those of you larger 3PLs worried about customer retention, the first place to start is improving DIRECT communication with your clients. Try to reduce the layers of communication between your customer and those that directly handle their account. Make it easier for them to contact those people directly. Most importantly, keep your customers notified about problems as they occur and BEFORE they have to call you about those problems. The burden of communication should never be put on your customer's shoulders - it is always on yours.

For those shippers out there who are frustrated with their current 3PL or other freight provider, try taking a look at some of the smaller players in the market. Smaller companies tend to be more attentive and proactive in dealing with their customers problems. However, if you are just looking for the cheapest deal around and hire logistics providers based on the lowest price available, then you might as well stick with your current provider. After all, you get what you pay for.

Air Cargo World publishes list of Top 50 Cargo Airlines.

I finally found enough time to browse through the September 2005 issue of Air Cargo World and the front page story is their listing of the top 50 cargo airlines in 2004.

I hope Air Cargo World doesn't mind me posting a quick list of them here, get the September issue of the magazine for the full story.

Before I post the list, you should know it is based on total freight tonne-kilometers flown - they do not differentiate between domestic and international. What is a freight tonne-kilometer ? Simple : 1 freight tonne-kilometer means 1 tonne of freight was flown 1 kilometer. And also, the freight tonne-kilometers flown (FTKs) are shown in millions of FTKs :
The list can be found here : http://www.aircargoworld.com/features/0905_1.htm

Here is a quick list of the top 25 from the downloadable pdf page, with just the name of the airline and the number of FTKs (in millions of FTKs) :

1. FedEx Express - 14,579
2. Korean Air - 8,264
3. Lufthansa - 8,040
4. UPS - 7,353
5. Singapore Airlines - 7,143
6. Cathay Pacific - 5,876
7. China Airlines - 5,642
8. Atlas Air - 5,536
9. EVA Air - 5,477
10. Air France - 5,388
11. Japan Airlines - 4,924
12. British Airways - 4,778
13. Cargolux - 4,670
14. KLM - 4,535
15. Emirates - 3,508
16. Polar Air Cargo - 3,413
17. Martinair - 3,363
18. Northwest Airlines - 3,325
19. American Airlines - 2,854
20. Asiana Airlines - 2,668
21. Malaysia Airline System - 2,597
22. United Airlines - 2,571
23. Air China - 2,551
24. Nippon Cargo Airlines - 2,400
25. China Eastern Airlines - 1,877

Top gainers in the top 50 percentage-wise from 2003 to 2004 include China Eastern Airlines (+43.5%), Qantas (+40.6%), Emirates (+35.7%), Dragon Air (+25.1%), Aeroflot (+22.2%), Gulf Air (+21.3%), Iberia Airlines (+19.9%) Korean Air (+19.8%), Malaysia Airline Systems (+19.5%), and China Airlines (+19.4%).

For Shippers : Cargo Claims/Insurance : Be Aware of the Standard Terms and Conditions of your Freight Provider

When it comes to shipping cargo, cargo insurance and cargo claims is almost an afterthought. It is one of those things that most shippers don't seem to think about until it happens. And, just like in your personal life, it is always best to think about insurance BEFORE something bad happens.

One of the areas that shippers tend to find the most trouble and confusion with is cargo insurance, particularly cargo claims. It continually surprises me when customers call me to inform me that they received some damaged product and expect our company to reimburse them in full. And then their resultant frustration and anger when I inform them that unless they bought cargo insurance - which we always recommend to all our shippers - then we are only liable for the maximum liability as per the terms and conditions of our waybill.

Here is some valuable information and advice for all shippers out therebefore you tender a shipment to your freight provider :

1. Do you have cargo insurance ? Most larger companies have cargo insurance included as part of their overall coverage. Check with your insurance provider to confirm if you have cargo insurance coverage and if not, the cost. If you do not have cargo insurance coverage, then your freight provider can easily provide it for you on a shipment per shipment basis. Costs and terms vary widely depending on your freight provider, so check with them carefully to ensure you understand the rates and terms and conditions of their cargo insurance coverage.
2. Regardless of whether you have your own cargo insurance coverage or not, before you get all excited and sign that incredibly cheap contract with your new freight provider, STOP and ask them what their standard terms and conditions are for all modes of transportation in the case of damage or loss. Most reputable companies have this information printed on their waybills, usually the back, explaining clearly their maximum liability in the case of damage or loss and the conditions that apply. Get blank copies of your freight provider's waybills and read them carefully to ensure that you are comfortable with their liability terms and conditions.
3. If you experience damage or loss with a shipment, STOP! Before you sign off that delivery receipt, mark down any and all damage or loss incurred. Contact your freight provider immediately in writing explaining clearly the condition of your shipment, when you first noticed the damage or loss, and indicating that you would like to process a claim with them. If your freight provider does not respond, follow up with them until they do. Your freight provider should advise the next steps to process your claim.
4. IMPORTANT : make sure that you file your claim within the guidelines of the terms and conditions indicated by your freight provider's waybill or other written terms and conditions. This is very important and one of the biggest reasons claims get denied. Almost always there are time limits defined in the terms and conditions and if you do not notify the freight provider within those time limits, then your claim will almost surely be denied.
5. If you have your own coverage through your insurance provider, be sure to notify them same time that you notify your freight provider.
6. IMPORTANT : you should be very clear that damage or loss incurred on a shipment does not absolve you of payment of freight charges. This is easily the most common misconception that shippers have about freight carriers. No freight carrier on earth is going to settle your claim unless you have paid the freight charges. Often when damage or loss occurs, the first and common reaction is frustration and anger, and your thoughts probably run along the lines of "forget my freight provider, I am not paying the bill". Please keep in mind that if you do this or threaten to do this, you are simply delaying settlement of your claim.
7. Always keep track of dates and documents and when you sent them, who you spoke to, etc.
8. Remember : if you did not insure your shipment with your freight carrier, then you will only be getting a settlement that adheres to your freight provider's terms and conditions as per their waybill. For example, most domestic freight carriers carry a maximum liability of only $ 0.50/lb. That means for a shipment of 1,000 lbs you will only be getting $ 500.00 - and that is ONLY if your freight provider is at fault and agrees to honor your claim.

My company always strongly urges our clients to insure their shipments, either through their own insurance carrier or with us on a per shipment basis. It costs very little to insure a shipment that if damaged could cost you your client or your business. Be smart, insure your shipments and check carefully with your freight provider to ensure that you understand clearly their maximum liability and terms and conditions in the case of a damage or loss.

Quick News (belated) for Wed 9-14-05 and Thursday 9-15-05 :

As the economic recovery slowly continues in the Gulf Coast areas affected by Katrina, there is a two sided coin being shown - one of horrific devastation to the regional and national economy and one of a silver lining as businesses involved in the recovery effort or located just outside the disaster zone gain a boost :

Hurricane Katrina's economic toll continues to mount - its cost evident in
near-record energy prices, snarled shipping traffic, lost jobs and wrecked
businesses. But nearly two weeks after landfall, its impact is shaping up as one
of extremes.

The hurricane caused at least$125 billion in economic
damage and could cost the insurance industry up to $60 billion in claims, Risk
Management Solutions of Newark, Calif., said in an updated estimate Friday.
That's significantly higher than the previous record-setting storm, Hurricane
Andrew in 1992, which caused nearly $21 billion in insured losses in today's
dollars.

The storm is expected to lop off from 0.5 to 1 percentage point
from U.S. gross domestic product in the second half of 2005 and about half that
amount in 2006. In Europe and Asia, financial leaders warn that surging energy
prices could stunt growth.

Yet, hotels outside the regions damaged by
Katrina are benefiting as business conventions are relocated. Steel makers
expect a short-term lift from the massive reconstruction. And oil and gas
producers - in spite of damage to rigs and refineries - are reaping huge sums.

The trucking industry has had a similar bump in demand tied to Katrina.
Schneider National of Green Bay, Wis., saw its truckloads increase by 13 percent
last week and the Federal Emergency Management Agency in some cases paid for
roundtrips to quickly get supplies to the Gulf Coast.

Barges that might
have earned $200 to $400 a day for a 30-day trip between New Orleans and
Pittsburgh are now commanding as much as $800 to $1,000. "It's kind of like the
people who rushed to the gas stations," said Mark Knoy, president of AEP River
Operations, a division of the Columbus, Ohio-based power company American
Electric Power.

You can read the whole story here.


Meanwhile, "...to the great relief of farmers, ports around New Orleans began reopening Tuesday..." :

Although it's far from normal, the reopening of the Mississippi River marked a
milestone in the recovery from Hurricane Katrina -- and not a moment too soon,
with the fall harvest underway, shipping costs soaring and grain storage scarce.
"We've got problems, but they look solvable," said Jerry Fruin, a
transportation specialist at the University of Minnesota. "The (gulf)
infrastructure was not destroyed: the channel, the elevators, the barge fleet
for the most part is intact, and it's a matter of getting it working."
Eight
of the 10 grain-exporting elevators in the New Orleans area have power and are
resuming operations to some degree, said Randy Gordon with the National Grain
and Feed Association. That's important because 60 percent of America's grain
exports pass through those facilities.
"You don't go from zero to 100
percent operations overnight, and it is a gradual process," Gordon said. But, he
said, continuing progress is being made, and significant progress."

Wow, big surprise, hold your shock and awe : fresh on Delta's heels, Northwest is filing for bankruptcy. Frankly, I'm surprised it took this long. Whose next ?


Meanwhile, Korean Air - the largest international air cargo carrier in the world - seems to be doing just fine :

When Korean Air began running cargo flights to the United States in 1971,
company executives knocked on the hotel-room doors of American businessmen
importing wigs, then a major export item from South Korea, begging them to try
an airline they had hardly heard of.

Three decades later, Korean Air is
now the largest carrier of airfreight on international routes. Riding on South
Korea's booming technology industry, the airline now carries semiconductors,
flat-panel TV screens and cellphones to 38 destinations in 25 countries.

And Boeing says the forecast for cargo planes looks bright :

The Boeing Co. said the world's fleet of cargo planes will more than double over
the next 20 years, as the air freight industry completes its emergence from the
Sept. 11, 2001, terrorist attacks.
The report said the share of wide-body
freighters is expected to increase to 64 percent of the fleet, compared to 47
percent currently. About 60 percent of the freighters that will be added to the
fleet will be wide-body airplanes, officials said.
"We continue to note that
the strongest growth will be associated with Asia," said Tom Hoang, Boeing
regional director of cargo marketing in the Americas and China. "China, in
particular, is an area where the air cargo industry, while still young, is
poised for high growth rates -- in the range of 10 percent per year."

Speaking of China, Yellow Roadway has finalized a deal to buy half of an airfreight importer in China :

The Overland Park-based company announced in June that it had paid $45
million to buy out all or part of four other partners in JHJ International
Transportation Co. Yellow will have 50 percent ownership of JHJ with Jin Jiang
Investments.
JHJ, which also provides ocean freight forwarding and logistics
services, has 22 locations in China and has annual revenue of $330
million.

In more Asia news :

Mapletree Investments will be developing a 56-hectare logistics park in
Vietnam.
The park is located within the Vietnam-Singapore Industrial Park II
near Ho Chi Minh City.
It will have a land lease of about 50 years and will
contain a Free-Trade Zone and non-bonded warehouses.

Quick News for Tuesday 9-13-05

Despite the few spots of good news we have noted concerning the transportation and logistics surrounding the relief efforts of hurricane Katrina, due to the overwhelming damage and incredible need caused by the hurricane, problems still abound, as noted by EU officials who have experienced some logistics problems in getting aid to the areas affected by Katrina :

"There appear to be some transportation problems," Barbara Helfferich, a
spokeswoman for the European Union's executive Commission, told a news
briefing.
She said a Swedish plane laden with aid was waiting to take off but
had not got U.S. approval to enter the United States.
High-speed pumps
offered by Germany had arrived but Helfferich said unspecified "coordination
problems" in the United States had prevented them from being deployed so far.

One of the obvious side effects of Hurricane Katrina is that more and more cargo is being handled by smaller ports while the port of New Orleans recovers.

The docks in Morehead City are booming this week, as longshoremen unload
twice the amount of rubber that normally passes through the port. The same is
true down the coast in Wilmington, where 12,000 tons of steel came off the boat
Wednesday.
The Port of Pensacola in Florida has increased cargo traffic by
about 60 percent and companies are calling to see how much more steel, lumber
and other products it can handle. Panama City, Fla., expects a 60 to 70 percent
increase this year.
"I've been here eight years and I've never seen this
level of activity before," Pensacola port director Leon Walker said.
None of
those four ports ranks in the country's top 40 by tonnage, but they are
receiving cargo once headed for New Orleans or Pascagoula and Gulfport, Miss.,
before Hurricane Katrina swept through, damaging ports and forcing shippers to
divert to docks elsewhere along the Gulf and East coasts.

Business must go on, and as always when 1 part of the logistics puzzle breaks down, other pieces of the puzzled pick up the slack and a solution is found.


But hopefully New Orleans will get back on its feet sooner than expected. A promising sign that things are moving in the right direction, the port of New Orleans re-opened today and commercial flights began at the airport once again:

In New Orleans, a shipment of steel coils left the port by barge Monday,
bound for a Hyundai auto plant in Greenville, Ala., port spokesman Chris Bonura
said.
The port expected the arrival of its first cargo ship since the
hurricane late Tuesday and at least three more ships by week's end, said Gary
LaGrange, port president and chief executive. The arriving ship was carrying up
to 500 containers of coffee and wood products from Argentina, Brazil and Mexico,
LaGrange said.
"It's a historical moment. Two weeks ago the prognosis was six
months, so to pull it off so our customers have enough faith and confidence in
us is very heartwarming," LaGrange said. He added: "From a commercial and
psychological standpoint, this is five stars. This shows the people of New
Orleans their city is back in business."
The port of New Orleans is the
gateway to a river system serving 33 states along the Mississippi River or its
tributaries. The port also connects to six railroads.
Also Tuesday, Louis
Armstrong New Orleans International Airport was scheduled to receive its first
commercial flight since Katrina struck on Aug. 29.

In other positive news, Eagle Global Logistics pulled out all the stops in locating all their displaced employees and is going to extraordinary lengths to ensure that their displaced employees are well taken care of. A must read:

EGL is sparing no expense to ensure employees are receiving adequate aid in
the midst of this crisis. For employees unable to work or who have temporarily
relocated outside the EGL service network, the Company is continuing to
compensate 100 percent of their salary. In addition, the Company has offered
jobs at any available location in the EGL system and relocation assistance to
any employee not wishing to return to the New Orleans area. Ten employees and
their families have moved to Houston, where EGL is providing employment,
temporary housing and the expenses necessary to meet their basic needs. EGL's
Executive Management Team and representatives from the Human Resources
Department will review each employee's status on a continuing basis for up to
three months in an attempt to reduce the anguish caused by Hurricane Katrina.
"Our employees are the foundation of our Company, and we are committed to
helping our people overcome this devastating event and rebuilding their lives.
We view each other as family, and this was clearly demonstrated by the speed in
which our stations and corporate employees united to respond to this tragedy,"
stated James R. Crane, Chairman and CEO of EGL.

Wow. This is one company that knows how to take good care of their employees, which is a rare thing these days, especially in our industry. How is your company handling employees affected by Hurricane Katrina ? Let us know.


In unfortunate economic news, the blow to the nation's logistics and transportation industry due to Katrina is pushing up costs for numerous commodities:

Wholesale prices of tuna, grouper and snapper -- all of which are found in
the Gulf of Mexico -- are up $1 to $1.50 per pound.

Crabs became tough to find in the Baltimore area in early September. Yes,
Maryland has its own crabs, but the big ones come from the Gulf. That led to
trouble over the Labor Day weekend, traditionally a time for steamed crabs in
the Chesapeake Bay area.
"The phone was ringing, we just didn't have the
crabs," said Chris Hubbard, an owner of Don's Crabs in Maryland.
The pain
doesn't stop there. Farmers trying to ship their harvest on the Mississippi
River may have trouble finding barge space.

About 60-70 percent of the nation's grain exports travel from the Port of
New Orleans.

The storm left giant agricultural companies like Cargill Inc. high and dry.
At one point last week, the firm had 300 barges loaded with grain, fertilizer
and other goods stranded on the Mississippi. Cargill and others are scrambling
for storage space for grain, as trains bound for New Orleans are parked across
the country.

The Malacca Strait is one of the most congested and important shipping lanes in the world. It is the main route connecting the Indian and Pacific oceans and tens of thousands of vessel traverse it yearly. And.......it is plagued by piracy. Yes, there are still pirates in the world today, but today's pirates run around in speedboats with heavy weapons, it has been a growing problem in the Malacca Strait for many years now :

- More than 50,000 commercial vessels ply the sea lane each year, carrying
a quarter of global trade, half of all oil shipments and over 80 percent of oil
imports for China and Japan.
- The waterway has been a magnet for pirates for centuries. The
International Maritime Bureau said in its 2004 report that of the 325 recorded
pirate attacks worldwide, 93 cases occurred in Indonesian waters, including the
Malacca Strait.
- Security analysts have warned that terrorists could
paralyse trade in the strait by attacking tankers carrying liquefied natural gas
or by sinking a large ship at the sea lane's shallowest point, which is just 25
metres (82 feet) deep.
- Analysts say this could send freight rates up 500
percent or more as ships would have to make a detour of around 1,000 km (600
miles) through the Indonesian archipelago.

Finally, Singapore, Malaysia, Thailand, and Indonesia have started coordinated air patrols to better protect against piracy and also to reduce the risk of a seaborne terrorist attack:

Indonesia, Malaysia, Singapore and Thailand launched their first joint air
patrols over the Malacca Strait on Tuesday to boost maritime security in the
pirate-infested waterway.
The launch of coordinated air patrols marks
the
strongest commitment yet by littoral states to try to curb piracy and
prevent
militants mounting a seaborne attack to cripple global trade.

Read the whole thing here.


And finally, in an effort to improve Indonesia's logistics industry, a study released at a seminar called "Enhancing Indonesia's competitiveness: Meeting the Challenges for Industrial Development" may surprise some : they claim that Indonesia's logistics costs are lower than those in Thailand :

The study showed that total logistics costs in Indonesia comprised 14.08
percent of total production costs, while in Thailand the figure stood at 22
percent

Don't get so excited that you start making plans to source your product from Indonesia rather than Thailand - Indonesia suffers from low productivity and exports are subject to burdensome government regulations, not to mention other problems such as corruption and poor infrastructure, as this article also points out.

The government needs to deregulate and simplify bureaucracy as a short-term
solution to increasing investment, as well as improving institutions such as the
tax office, customs and others in the long term, said Chatib, who is also an
economic advisor to Coordinating Minister for the Economy Aburizal Bakrie.
The study further revealed a surprising finding that the cost of logistics
from suppliers to manufacturers was almost double the cost from factories to
port, contrary to the wide perception that costs in ports were the major factor
in reducing the country's product competitiveness.
"One explanation is that
Indonesia's export industries still require more imported than domestic input,
which has an implication to the higher input logistics costs," it said.
The
study said that logistics costs from input to manufacturer contributes 7.22
percent of the total cost, in-house logistics contributes 2.82 percent and
logistics from factories to port 4.04 percent.
The main sources of the
inefficiency in logistics in export industries, based on respondents
perceptions, were poor infrastructure, illegal imposts along distribution
chains, and government regulations such as those for export procedures.

But at least they are looking at the positive points they were able to discover from their study while openly discussing the problems they still face.

Good News Katrina : DHL moves 4.77 Million pounds of Relief Supplies

Led by Chris Weeks, Director, Disaster Response Team, a group of 20 DHL
employee volunteers have dedicated their transportation and logistics expertise
to the independent United States Agency for International Development (USAID)
and its Office of Foreign Disaster Assistance (OFDA), working in non-stop shifts
to manage the influx of commercial and military aircraft arriving at the Base.
The DHL Disaster Response Team assists with unloading the aircraft, the sort and
inventory of all donations, and reload and forwarding of ground shipments direct
to the areas ravaged by Hurricane Katrina.
"With millions of pounds of
relief supplies arriving at the Little Rock Air Force Base from all over the
world, our most critical task is to ensure we keep relief supplies moving to
help the victims of Hurricane Katrina," said Chris Weeks, Director, DHL Disaster
Response Team. "We'll do whatever it takes to deliver the supplies into the
hands of the people who need it, quickly and reliably."
DHL is coordinating
with the OFDA and the Federal Emergency Management Agency (FEMA) to have
supplies delivered to locations identified by FEMA based on immediate need. To
date, goods donated from 12 countries -- the United Kingdom, France, Italy,
China, Spain, Egypt, Russia, Israel, Denmark, Tunisia, Thailand, and Czech
Republic -- have been loaded into 60 trucks and dispatched from Little Rock Air
Force Base to locations across the Gulf Coast, including Camp Beauregard in
Pineville, Louisiana; the Superdome in New Orleans; and Jackson, Mississippi.
Relief shipments have included:
Over 33,000 pounds of premium rice, a gift
from the King of Thailand
113,000 military meal rations ("Meals Ready to
Eat") from the United Kingdom, France, Russia and Spain
Nearly 1,000 kits of
children's school supplies and books from Denmark
600 generators, 800 tents
and 10,000 sets of children's clothing from China
More than 25,000 pieces of
baby food, instant cereal, and formula from Israel
Water and sanitation
products from Tunisia, including 900 boxes of soap and detergent
Relief
shipments have also included tents, generators, water, milk, baby food, first
aid kits and other medical supplies, soap, mattresses and bedding, clothes,
diapers, wheelchairs, tarps, and kitchen sets,. This week, additional flights
are expected to arrive loaded with international aid from Peru, Finland,
Romania, Chile, South Korea, Russia, the Czech Republic, Luxembourg, India,
Denmark, Slovenia, and Greece.

Read the whole thing.

Quick News for Monday 9-12-05

DHL begins rollout of nationwide plan to improve customer service. No really, I am serious, stop laughing, they are spending $50 Million over a 4 month period in a campaign to improve customer service. I probably shouldn't make light, I am sure are plenty of very satisfied DHL customers out there, I just never had very good experiences with them. Got any positive or negative DHL stories you'd like to share ? We love to hear them.


It's been almost 2 weeks since Katrina hit New Orleans and the port of New Orleans, an important player in the worldwide distribution of a number of commodities, is eager to get back in the game:

In putting the Port of New Orleans out of commission, Hurricane Katrina didn't just deliver another blow to the local economy.

The port is the gateway to a river system that allows cargo to move to and from 33 states, either on the Mississippi or its tributaries. Its reach is broadened farther with the port's connection to six railroads.

Knocking out one of the world's busiest shipping ports has set in motion almost certainly higher prices on goods working their way to stores and manufacturers warehouses nationwide.

"It's inevitable," said Yvonne Rhodes, vice president of Houston-based shipping consultant Ocean Trader International. "It's not just oil and gas." The port's closure freezes or slows movement of a range of goods, Rhodes said.

Read the whole thing, perfect perspective on how the loss of a major port can effect the entire logistics picture for a number of economies.


In Saipan, rising fuel surcharges are increasing transportation costs which is forcing prices on all imports to rise :

Carmen Safeway Enterprises Inc., which operates as a wholesaler and retailer of general merchandise, said the impending increase in ocean freight costs would result in high prices of their commodities.

"We also bring in goods via Matson and Horizon," said Carmen Safeway general manager Eli Maravilla. "We don't want to [increase the prices of commodities], but we can't help it."

"With the situation of the economy right now, it's sad that we have to increase prices at this time," Maravilla said.

He said past increases in fuel prices and the implementation of fuel surcharge by the Commonwealth Utilities Corp. have forced Carmen Safeway to increase prices of commodities.

Logistics behemoth Deutsche Post (i.e. DHL/Airborne/Danzas/AEI all rolled into 1) is expected to announce that it has reached a deal to take over Exel Global Logistics, which, if it happens, would make Deutsche Post the largest logistics organization in the world, hands down.


In another good news story about how logistics companies are helping out with the relief effort, Pilot Airfreight has announced that they have shipped more than 115,000 meals to victims of Katrina :

Both deliveries originated at the San Joaquin Defense Depot in Tracy, California and were flown from Stockton Airport to Louis Armstrong International Airport in New Orleans. The first shipment, which contained 35,000 pounds of ready-to-eat meals, required Pilot Air Freight to supply a 727 cargo aircraft within 2.5 hours of notice at 9 pm on Wednesday, September 7, 2005 and deliver the meals to New Orleans by 8 am the next morning. The second shipment, which contained 100,000 pounds of ready-to-eat meals, came with 1.5 hours of notice on the evening of Thursday, September 8, 2005 and required Pilot Air Freight to supply a cargo DC-8 aircraft to meet the next morning, 7 am delivery deadline.

Awesome.


On to the bad news, the Center for Asia Pacific Aviation in Sydney reports that airfreight volumes continue to weaken as capacity outpaces demand:

The Sydney-based international aviation consultancy said Lufthansa is the latest global carrier to report further weakness in cargo traffic despite a strong passenger demand.

"It could be evidence of an easing in underlying economic conditions, which would be of concern to airlines and airports worldwide," CAPA said.

International air freight volumes are seen as a key forward indicator of global economic activity.

On Sept 1, the International Air Transport Association (IATA) reported July year-on-year growth in international cargo traffic of 2.2 pct, much weaker than year-on-year passenger growth of 8.5 pct.

IATA's July data continues a trend of falling international freight volume growth, which over the first six months of the year was just 3.4 pct compared with international passenger growth for the first half of 8.8 pct.

The organization sees the freight volume data as indicating extraordinarily high fuel prices are softening international trade.

Ouch. Not good.

And, last, but not least, FedEx and Aegean Airlines have placed orders for a number of Airbus aircraft.

update : Late, but not forgotten : Delta Airlines plans to file for bankruptcy protection:

The consultant, who was not authorized to disclose the information and thus spoke on condition of anonymity, said Delta is working with GE Commercial Finance and other creditors to arrange roughly $2 billion in debtor-in-possession financing. The money would allow the airline to operate in bankruptcy.

Delta, which has lost nearly $10 billion since January 2001, likely will pledge the few remaining assets not already pledged as collateral for loans as part of the bankruptcy financing agreement, the consultant said. "There is nothing unencumbered after this," according to this consultant.

For Shippers : Re-Routing Your Ocean Imports to New Orleans

For those of you who had LCL (less than containerload) cargo destined for New Orleans, you should talk to your freight forwarder or logistics provider about re-routing your cargo through Shreveport, LA.

Most of the cargo from the pacific rim passes through the port of Los Angeles where it is then transferred inland via rail to its respective port. After Hurricane Katrina, all cargo that was already on its way to New Orleans was most likely off-loaded in Houston. Cargo that was scheduled to leave Los Angeles was held there.

Check with your service provider on the current status of your cargo. If the cargo is already on hold in Houston, it is possible you can pick it up there, but with all the relief efforts going on as well as a backlog of freight already on hand, you should expect delays in recovering your freight.

Whether your cargo is on hold in Houston or Los Angeles, you should be able to re-route it to Shreveport. However, keep in mind that you will have to pay a good bit extra to get the freight to Shreveport or anywhere that was affected by the Hurricane.

Speak with your logistics provider about re-routing your cargo to Shreveport. If anyone else out there has further advice on re-routing shipments around New Orleans, please speak up.

Quick News for Thursday 9-8-05 :

The National Grain and Feed Association and North American Grain Association issue a statement on the ongoing progress of hurricane Katrina relief and recovery and its relation to the grain export facilities affected by Katrina :

The NGFA and NAEGA also commend U.S. government agencies for their efforts
to address critical infrastructure challenges that must be met so that these
facilities may resume efficient operations.

In addition, grain firms continue the process of locating their employees,
and there is a critical need to provide housing and living accommodations,
including food and water, near these facilities to enable them to operate on an
around-the-clock basis.
Finally, and extremely importantly, given curfews in
the region to restore law-and-order, there is a need for local government
authorities and law enforcement agencies to devise an acceptable system for
allowing grain elevator employees to access and operate facilities on a 24/7
basis, including during night-time hours.

Read the whole thing.


For drivers and trucking companies that want to help with the Katrina relief effort, here is a must read resource on who to contact and where to go to help :

Truckers have already contributed greatly to the Hurricane Katrina
relief efforts through the transportation of needed water, food, clothing and
other necessities to the Gulf Coast region.

Truckers wishing to contribute money, food or clothing or participate in
the relief effort by driving should read the following information and choose
the course of action that best fits what they wish to do.

Again, read the whole thing.


And in some much needed good news from the transportation industry regarding the relief efforts with Hurricane Katrina, "FedEx Corp. has delivered nothing but disaster aid to the Gulf Coast for more than a week"

By Tuesday, FedEx - the largest transportation donor for the American Red
Cross - had shipped in excess of 110 tons of supplies, mostly by truck, and was
resuming flights Tuesday night into Lafayette and Baton Rouge, La.
"Very
simply, if we need items shipped, we call FedEx," said Kara Bunte, American Red
Cross spokeswoman in Washington.

"Two trailers turned into six," said David Westrick, FedEx Ground
spokesman. "One of our sales reps, Melissa Burns, stepped up to make sure they
were collecting the right items and worked with us to get the trailers
moved."
FedEx shipped more than 40 tons of cots and hygiene kits to the
Astrodome.
"All of our operating companies are working together," said Ryan
Furby, FedEx spokesman, in a disaster relief effort being coordinated largely in
Memphis.
"The calls come in and we line up the shipping," he said, including
trailer loads of supplies donated by employees.

Thank you FedEx, and keep up the good work !


Unfortunately, it's not all good news on the trucking front. In Michigan, truckers are "...fed up with what they are calling unnecessary bureaucracy."

Federal Emergency Management Agency contacted Great Lakes Customs
Brokerage, who in turn contracted Terveer Trucking of Fremont. Terveer
immediately sent two drivers to Mississippi with 40,000 pounds of much-needed
ice. They arrived three days ago, but the ice is still in the back of the
trailer and not in the hands of those who need it.
Lewis Snyder and Diane
Phillips have found it to be much more complicated than just packing at trailer
with ice then driving it to where it needs to be.
"They've been down there
since Saturday. And they're still loaded with ice," said Peter
Terveer.
Snyder and Phillips began their journey from their company in
Fremont. They then drove to Benton Harbor where they picked up the ice and
continued on to Meridian, Mississippi where FEMA officials told them to bring
it.
"We started out in Meridian at a Naval air station and we were probably
there for 20 minutes, a half hour, and they sent us off to Jackson,
Mississippi," Snyder told 24 Hour News 8 by phone.
When they arrived in
Jackson, Mississippi, Snyder says he and Phillips got the runaround
again.
"Finally the Jackson County sheriff actually spoke with FEMA and the
Red Cross who wanted us to go back to Meridian, and he told them no, that as far
as he was concerned he was going to start sending trucks out, and he hung up on
them," adds Snyder.
They went south from Jackson, were stopped in Riley, and
are now in Wiggins, Mississippi. Four cities later and the ice still hasn't been
unloaded, as well as two hungry, tired, and frustrated truck drivers from West
Michigan.

Disgraceful and ridiculous.


In the no-surprise-here news department, struggling airline (aren't they all struggling?) Delta Airlines is cutting flights in Cincinnati and selling 11 planes in an attempt to restructure their costs.


On the other side of the fence, Target Logistics has more than doubled their earnings in 2004.

On Thursday, the Baltimore-based freight forwarder reported earnings for the
quarter ended June 30 of $505,000, or 2 cents per share. A year ago, Target
Logistics reported earnings of $222,000, or 1 cent per share. Revenue rose 10.6
percent from a year ago to $36.7 million.
For the year ended June 30, Target
reported earnings of $1.56 million, or 7 cents per share. In the 2004 fiscal
year, Target recorded earnings of $540,000, or 3 cents per share. Annual revenue
rose 9.8 percent to $138 million.

Not to be outdone, UTi Logistics "reported a 38 percent rise in second-quarter profits Thursday."


And finally, Saddle Creek Corporation, a 3PL company, is named one of the top 100 3PL providers by Inbound Logistics Magazine. It's clients include Sam's Club and The Home Depot


If you have any other logistics news regarding Katrina relief efforts, good or bad, we want to hear about it, let us know.

Must Read for All Logistics Professionals : Hurricane Katrina: 5 Ways to Manage the Transportation Impact

This is an excellent article with valuable advice for shippers on how to deal with the impact of Hurricane Katrina from a logistics/transportation viewpoint. Here is the quick summary:

Recommendations for
Action
√ Check the financial health of
your carriers and consider paying them faster.
√ Model fuel surcharge impacts on
your freight budget and product margins.
√ Reevaluate the benefit of using a
commercial transportation management system that can accurately model fuel
surcharges.
√ Minimize the impact of fuel
surcharges by creating additional carrier efficiencies. Make time for risk
management and contingency planning.

Read the whole thing.

UPS and FedEx make big steps in China

Somewhat old news, but news nonetheless, Air Cargo News reports both UPS and FedEx making substantial investments in China, with UPS investing an estimated USD 500 million to create a hub in Shanghai-Pudong airport while FedEx plans to invest about USD 150 million in building a facility at Guangzhou's Baiyun International Airport, which would be FedEx's largest Asia-Pacific hub.

While both integrators are targeting completely different areas of China, the investments signal the growing importance of the Chinese domestic and international market in their current and future plans.