Ocean Transportation News — April, 2009

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How Is The Logistics Sector Faring In Difficult Times?
According to Recession Watch, a new information service from Transport Intelligence (Ti), an indicator called Global Logistics Business Confidence Index shows that overall, despite the general economic gloom, respondents are still confident about the present state of the industry. However, when asked to describe their confidence in the economic prospects over the next 3 months, compared to the previous 3 months, the index falls dramatically. It then recovers slightly over a 12-month period, respondents overall believing there will be a small rebound in confidence.

The survey that produced the Global Logistics Business Confidence Index shows that there was a high degree of variation in sector confidence. It shows that Intermodal and Pharma logistics and developing markets, such as China and India, are also still good places to be doing business.

But now for the bad news. Airfreight volumes (FTKs) fell an unprecedented 22.6% in December 2008, compared to the same month the previous year according to IATA. The previous largest monthly fall (the greatest for some 30 years) was a 13.9% decline in September 2001 following the 9-11 terrorist attacks. Ti's own review of leading airports showed similar high falls, with the leading Asian airports being the hardest hit (particularly Shanghai).

In the sea freight sector, all major ports experienced...
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Maersk Logistics, MIT Jointly Study Carbon Footprint
Maersk Logistics has joined the MIT Center for Transportation & Logistics Supply Chain Exchange, where it will collaborate with researchers on enhancing carbon footprint methodologies, which Maersk Logistics will use in the enhancement of its SupplyChain CarbonCheck service.

CarbonCheck is a consulting service aimed at identifying carbon reduction potential in global supply chains. In a four-step methodology, Maersk Logistics identifies...
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Safely Navigating Treacherous Economic Waters
The instability of the international container shipping sector, capacity withdrawal on some routes and "slow steaming" practices will expose exporters and importers to greater risks.

These are unprecedented times for global container shipping and for trans-Pacific container shipping--not just for the global economy. Asia-to-U.S. container traffic volumes had started their retreat into negative growth as long ago as the second quarter of 2007, and ocean carriers have had to terminate services, withdraw capacity and desperately seek reductions in their operating costs. They will continue this policy of active capacity retrenchment during 2009, with few exceptions. Much ship capacity will be mothballed.

Whether this will lead to international shippers experiencing difficulties securing active shipping capacity is harder to predict than in previous years, but it does not look as if wholesale capacity shortages will occur during 2009, as there are already many idle containerships "parked" in several ports around the world and ready to get back into service.

The ocean carrier industry is staring down the barrel of...
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Logistics Council Issues 4th Edition of "Freight Claims in Plain English"
The Transportation & Logistics Council has announced the fourth edition of "Freight Claims in Plain English," with a publication date of March. Authored by George Carl Pezold and William J. Augello, the book is aimed at transportation and logistics professionals who are involved in claims for loss or damage of freight in transit. It is used as...
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Steamship Industry Challenges and Why 'Nearshoring' Won't Work
The current economic downturn is the worst for ocean transportation in at least 40 years, but the interconnected nature of trade guarantees that the long-term prospects for recovery are very strong. Growth of four to six percent is not out of the question. In the meantime, while extended supply chains are problematic, "the idea that Americans are again going to sew and make toys is silliness."...
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You Should Cut International Logistics Costs, No Doubt. But How?
Companies and their logistics service providers need to reduce their international transport and logistics costs. Despite the uncertainties of the current business environment, they can apply both old and new techniques.

Expansion plans are shelved. Demand for companies' products has become very volatile and uncertain. And yesterday's focus on "agile supply chains" has, for many international companies, shifted to one on "lower-cost supply chains." In this context, international supply chain managers and international logistics directors are asked by their CFOs to "optimize" (or it is minimize?) logistics costs.

This is the agenda for global logistics in 2009. The pressure to reduce international transportation and logistics costs should be addressed by using old, proven techniques as well as new approaches, when opportunities arise.
Techniques and Trade-offs...
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