Air Cargo traffic up at Alaska's airports

by Channel 2 News staff
Tuesday, December 15, 2009

ANCHORAGE, Alaska -- After two years of declines, air cargo traffic at Alaska's airports is on the rise.

The Alaska International Airport System is reporting its first positive monthly year-over-year change in cargo traffic. The numbers come after months of steady decline, starting in 2007.

Anchorage and Fairbanks international airports have reported an 11 percent increase in combined cargo and passenger landings since November 2008.

Worldwide international freight is continuing to improve after the global recession caused a downward trend.

To view KTUU's article, please click here.

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Transportation infrastructure: Surface transportation funding gets another extension

Late last week, the United States Congress signed off on a seven-week extension to continue funding foe federal surface transportations until December 18.

This vote is part of a continuing resolution to continue funding for seven of 12 Fiscal 2010 spending bills which originally expired on September 30 and were extended in late September for four weeks with an October 31 expiration date.

While this continuing resolution ensures funding for surface transportation maintenance, development, and construction remains intact for roughly the next seven weeks, the American Association of State and Highway Transportation Officials (AASHTO) reported that due to an $8.7 billion rescission of states' highway contract authority that took effect on September 30, this extension will be at a level that is $1.5 billion lower in contract authority than for the similar period last year.

This most recent continuing resolution represents the second extension for surface transportation funding since SAFETEA-LU-the current $286 billion, five-year spending program-Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users- expired at the end of September. And it also signals that a more long-term fix is not likely to come in the short-term, due to Congress's ongoing focus over the health care reform debate.

Earlier this year, House Transportation and Infrastructure Committee Chairman James L. Oberstar drafted six-year, $500 billion bill introduced as a successor to SAFETEA-LU. Oberstar's plan-with a vision for a National Transportation Strategic Plan that is international in nature and national in scope-is at a standstill due to lack of sufficient funding mechanisms.

House Transportation and Infrastructure Committee Spokesman Jim Berard told LM that between now and the second continuing resolution deadline of December 18, a few different things may happen. One may be moving to a long-term bill and another may be coming to an agreement on another extension on an indeterminate amount of time.

Read the rest of the logisticsmgmt.com article here.

New Study Highlights Role of Third-Party Logistics Providers in Helping Shippers Adapt to Economic Challenges

The fourteenth Annual Third Party Logistics (3PL) Study examining the current global market for logistics outsourcing was recently released. The study surveyed shippers and logistics service providers in North America, Europe, Asia Pacific and Latin America. Key findings included:

* The economic downturn has created significant challenges for both shippers and third-party logistics providers (3PLs) – 82% of shippers are employing cost-cutting tactics and 60% are rethinking their supply chains and relationships with 3PLs
* 88% of shippers feel that IT-based logistics services are important, but only 42% are satisfied with the capabilities of their provider – as a result of this IT capability gap, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain and 3PLs reported similar difficulties in getting the data and commitment they need from shippers
* There are significant differences between how 3PLs evaluate their role in the supply chain and how they are viewed by shippers – 59% of shippers feel their use of 3PLs has a positive effect on customer service compared to 88% of 3PL respondents
* Shipper respondents devote an average of between 47% (in North America) and 66% (in Europe) of their total logistics expenditures to outsourcing and this is expected to increase in the next five years.

“Shipper-3PL relationships are being impacted significantly by the prevailing uncertainty and economic volatility in global markets,” said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology. “It is very important for 3PLs to mitigate or reduce any financial risk or service level impact that this may cause.”

Economic uncertainty and the use of 3PLs
Economic volatility has challenged shippers and 3PLs alike to contend with factors such as unpredictable demand, instability in fuel costs and currency valuation, and excess inventory. In response, not only are shippers attempting to cut costs, 77% are also seeking to improve forecasting and inventory management.

Cost reduction and improved reliability in services are the main factors likely to increase shipper respondents’ use of 3PLs. This includes converting fixed to variable costs (59%), expanding to new markets or offering new products (56%), and restructuring the supply chain network to improve financial performance (48%).

Read the rest of the mhia.org article here.

Logistics and manufacturing business: ISM report indicates manufacturing finally growing

After 18 consecutive months of contracting, the manufacturing sector showed signs of positive growth in August, according to the latest report from the Institute for Supply Management (ISM).

Norbert Ore, chair of ISM’s Manufacturing Business Survey Committee, said his reaction was “relief” to see the PMI, ISM’s composite index which covers the overall health of the manufacturing sector, rise four percentage points to 52.9 percent, marking the first time the index has climbed above 50 since the recession began.

Typically, the 50 percent mark is the dividing line between “growth” and “contraction,” whether in reference to the PMI or any other indices covered by the monthly ISM report.

It wasn’t exactly a surprise. August’s number represents the eighth straight month of increase for the index, and both Ore and ISM have been predicting the index would push past 50 in either the third or fourth quarter this year.

The ISM has also predicted that growth would continue through the rest of the year, paving the way for a stronger sign of recovery in 2010. The PMI alone, Ore said, will most likely stay above 50 until at least the end of the year. Even if it slips, it would have to fall 2.9 percentage points to go back to contraction, which Ore said is unlikely to happen.

“It would be such a large drop now,” he said.

Other ISM statistics from the sector reflect the growth. In August, 11 of the 18 manufacturing industries—Textile Mills; Apparel, Leather and Allied Products; Paper Products; Miscellaneous Manufacturing; Printing and Related Support Activities; Computer and Electronic Products; Transportation Equipment; Nonmetallic Mineral Products; Electrical Equipment, Appliances and Components; Fabricated Metal Products; and Chemical Products—reported growth.

But one of the driving factors, Ore said, was the new orders index, which went up 9.6 points to 64.9 percent. The boost, Ore said, is partially a rebounding from previously low numbers, but like the PMI growth, Ore expected new orders figures to stay above 50 percent for some time.

Data from a report released last Thursday by the Commerce Department reflected this increase. According to the DOC, orders for goods expected to last at least three years increased 4.9 percent in July, the third increase in the last four months, beating analysts’ predictions of a 3 percent increase.

The DOC added that non-transportation goods orders and the auto industry also improved, the latter due in part to the “cash for clunkers” program. In all, orders for durable goods rose by the largest amount in two years.

Ore said there was no doubt that the clunkers program, and the federal economic stimulus package in general, had impact on the manufacturing sector’s growth, but the ISM predictions are looking beyond the end of those programs to see an overall growth in the economy that is expected to continue.

Among the lagging numbers are employment and inventories. Employment, according to Ore and the ISM report, only went up 0.8 percentage points, and inventories also grew, by 0.9 points.

But a better “leading indicator” of how inventories are improving, Ore said, are customer inventories, which dropped by 3.5 percentage points to 39 percent. This indicates customers’ inventories are too low, which should stimulate new orders.

Ore said employment figures traditionally lag behind, both in good times and in bad, so it’s no surprise that the employment index hasn’t shot up like some of the other numbers.

“Manufacturers are very slow to let employees go these days, and they are also slow to rehire,” Ore said.

So far, Ore said the numbers reflect where ISM expected them to be, and the institute expects growth to continue.

“We’re in a normal business cycle-based recovery,” he said.

Read the rest of the logisticsmgmt.com article here.

Why 3PLs need to build their brand

Over the past several years, the global third party logistics (3PL) industry has changed dramatically. While the demand for 3PL services has grown steadily, the major logistics service providers have expanded their geographical reach and broadened their service offerings. At the same time, the structure of the industry has changed not only through mergers and acquisitions, but also through new market entry by many companies, including some funded by private equity investors. 3PL company reorganizations and name changes have become commonplace.

These changes have fostered a degree of buyer confusion in the marketplace, and many large 3PLs fear a possible “commoditization” of their services in the eyes of those who currently buy their services or are considering doing so. If this is indeed occurring, existing and potential customers will become increasingly indifferent when choosing between logistics service providers. And this, in turn, will intensify the price compression pressures that already plague the 3PL industry.

A key question that needs to be asked here is: What are executives of those 3PL companies doing in response to these market developments? Specifically, what steps have large 3PLs taken in recent years to differentiate their service offerings in the marketplace while strengthening their brands? Further, is there more that those executives should be doing in those areas?

This article addresses the typical steps that companies should take in building, refining, and strengthening their brands—and in particular examines recent attempts by major 3PLs to do so. Branding literature forms the basis for discussion of the general case, and the branding steps taken by large 3PLs were documented through data generated during 2006 and 2007 in surveys of the CEOs of major 3PLs operating in three geographic regions: North America, Europe, and the Asia-Pacific region. (For more on the surveys, see accompanying sidebar). We conclude with suggestions for 3PL industry executives concerning their future branding efforts—and the potential positive implications of these efforts on the buyers of these services.

Read the rest of the scmr.com article here.

Transportation infrastructure and policy: DOT calls on Congress for $20 billion to keep surface transportation funded through March 2011

At a time when funding for surface transportation programs is scarce, the Obama administration released a plan to keep programs in the black until March 2011, according to various media reports.

The main takeaways of the plan include a request to take $20 billion in revenue from the United States General Treasury Fund into a federal trust for highway and transit infrastructure projects, according to a Reuters report.

This news follows reports from last month indicating that the Highway Trust Fund (HTF) is again on the verge of insolvency and will require up to $7 billion to remain fully funded through 2009.

The HTF is the federal government’s primary source for financing highway, bridge, and transit projects, and it is largely funded by the motor fuel federal tax, which is 18.4 cents per gallon for gasoline and 24.4 cents for diesel and has not been raised since 1993. One main reason for the HTF’s dwindling financial resources is that Americans are driving fewer miles, as evidenced by Americans driving 90 million fewer miles year-over-year in fiscal 2008.

In mid-June, Department of Transportation Secretary Ray LaHood called on Congress to propose an immediate 18-month highway reauthorization bill that would replenish the HTF. He said at this time that if this does not happen the HTF could be out of capital by the end of next month, with states facing the prospect of losing key transportation funding.

This news comes on the heels of the recent release of a six-year surface transportation bill introduced by House Transportation and Infrastructure Committee Chairman James L. Oberstar (D-Minn.) that will likely cost $450-$500 billion. The current bill—SAFETEA-LU—expires on September 30. A main theme of Oberstar’s bill calls for a national transportation policy, as opposed to DOT’s current policies, which were established and are administered by separate DOT departments—each focusing on a single mode of transportation.

Read the rest of the logisticsmgmt.com article here.

Logistics and business manufacturing: Economic indicators are positive, but freight levels have not caught up

WASHINGTON and NEW YORK—While the recession continues, many reports indicate the economy has “bottomed out” and that a recovery may be in the works.

Some recent examples of a potential turnaround are:

• last week’s news from the Commerce Department that durable goods orders were up 1.9 percent in April at $161.5 billion;
• a recent analysis from freight transportation consultancy FTR Associates indicating that the worst of the recession is over, estimating that GDP growth will rise 2.7 percent in 2010 although “the road to recovery is likely to be difficult” and
• a report from the Conference Board indicating its Consumer Confidence index was up for the third straight month in May.

What’s more, recent data from Panjiva, an online search engine with detailed information on global suppliers and manufacturers, indicates that the number of global manufacturers shipping to U.S. customers was up for the second consecutive month, with February to March and March to April data up two and eight percent, respectively. Even though this appears to be positive, Panjiva CEO Josh Green told LM more stability is needed for a true turnaround.

To read the rest of the logisticmgmt.com article, click here.

Ocean cargo/global logistics: Pacific Maritime Association and ILWU face common challenge

SAN FRANCISCO—As U.S. West Coast load centers grapple with fewer inbound vessel calls and declining freight throughput, labor and management may be forced to do something new: cooperate.

Threatened May Day demonstrations and a work stoppage planned by the International Longshore and Warehouse Union (ILWU) Local 10 failed to materialize in the Bay Area last week, as dockworkers were told that a violation of their existing contract would result in five days of lost pay. And at this point, they can use all the pay they can get.

James McKenna, president and CEO of the Pacific Maritime Association (PMA), played hardball with the union for the first time since the new six-year contract was signed last summer, but shippers here suspect that it won’t be the last time he pleads with workers to play on the same team.

“How does this contract provide stability for West Coast Ports in an environment where reduced volumes and increased competition from Canada and Mexico ports is a reality?” asked Jean Banker, manager, finance and administrative services for the maritime division at the Port of Oakland. “How will the West Coast ports increase and maximize efficiency?”

Banker, who also serves on the Pacific Transportation Association’s (PTA) board of directors, may get some answers to those questions when McKenna addresses the PTA this Thursday at the “Ports & Terminals” luncheon in Oakland’s Jack London Square.  

As president of the PMA, which is headquartered in San Francisco, McKenna directs the association’s principal business activity of negotiating and administering maritime labor agreements with the ILWU.

Find the rest of the article at logisticsmgmnt.com.

West Coast Ports report container traffic decline

So far, while 2008 was a terrible year for container traffic at West Coast ports, 2009 is looking even worse. Here are the figures (in TEUs and their % decline from 2008 for the same time period) from the major West Coast container ports for January 2009:

Los Angeles: 587,004 or -10%

Port of Long Beach: 399,295 or -23.4%

Port of Oakland: 157,942 or -15.7%

Port of Seattle: 126,722 or -7.3%

Port of Tacoma: 109,265 or -15.9%

Some of the ports have reported February numbers as well that are even worse (Los Angeles is down a whopping -32.56% in February 2009 vs. February 2008). All of these figures are depressing and certainly a major cause for concern for anyone involved in global trade, particularly the Trans-Pacific. One of the recurring themes at the recent TPM (Trans-Pacific Maritime) Conference was the development of a competitive mindset at the ports of Los Angeles/Long Beach. Following my colleague’s post about how SoCal port fees are driving business away from the port, combined with the overall weak economy, it seems more than prudent that the ports focus on keeping whatever business they can. However, I am of the opinion that long term damage, in regards to trade industry’s overall perception of the SoCal port complex in general, has already been done and companies have been making decisions over the past few years with long term implications that will gradually pull cargo away from SoCal. Certainly when the economy eventually turns around, as it must, the SoCal port complex will see a nice boost in their numbers, but I am of the opinion that demand for All-Water to the East Coast, as well as alternate intermodal gateways such as Prince Rupert, will only grow, not diminsh, unless SoCal can convince all the players in the industry, including local communities, that SoCal is a competitive advantage.

We’ve been blogging about the dangers of the ports of LA/Long Beach in terms of competitiveness for some time now. For more on this subject, here’s plenty more for you:

U.S. cargo down for 18th month in a row

Report from 2009 Trans-Pacific Maritime Conference (TPM): Ron Widdows speech

Port of Los Angeles to pay for containers?

California ports’ risk losing dominance in Trans-Pacific trade

Lower container volumes = less work for ILWU

Governor Schwarzenegger vetoes Container Tax Bill

Long Beach / Los Angeles to implement yet another container fee

Be sure to check out our interview with the Prince Rupert Port Authority as well.

(source: 3PLwire.com)

What is Freight Fowarding?

A Firm specializing in arranging storage and shipping of merchandise on behalf of its shippers. It usually provides a full range of services including: 

• tracking inland transportation
  
• preparation of shipping
  
• warehousing
  
• booking cargo space
  
• negotiating freight charges
  
• freight consolidation
  
• cargoinsurance 
  

Freight forwarders usually ship under their own bills of lading or air waybills (called house bill of lading or house air waybill) and their agents or associates at the destination provide document delivery,and deconsolidation. Also called forwarder. (source: businessdictionary.com) 

About Alaska Traffic

Headquartered in Renton Washington, Alaska Traffic Co. offers reliable, economic freight and logistics services to the lower 48 states and anywhere in Alaska.

Our Solid transportation network and tenacity are unequalled when it comes to timely delivery. Solving problems and taking responsibility we give our customers the best Alaska transportation service. 

  

At Alaska Traffic we know how important it is for you to keep in touch with your Alaska Customers or lower 48 vendors. We can answer the often-asked questions: When is the shipment leaving? Is it complete? What about cutoffs? Which container is it in? When will it arrive? As your representative, we gladly answer these questions and take responsibility for tracking and communicating all information.  Represented by a seasoned manager who has the experience and authority to make decisions and solve problems to expedite your shipment.

Serving Alaska for over 5o years, discover why Alaska Traffic has been the preferred freight forwarder and consolidator for over four decades.