Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

API Publishes Oil & Gas Primer

I'm as keen as the next guy to rant about the Oil & Gas industry for keeping what many Americans see as excessive profits from the sale of oil and gasoline products. $4.00 dollar a gallon gasoline hurts.   Especially if you are like me and fill up more than one car each week to keep your busy family on the go. 

As a transportation and logistics professional I see the cost of fuel impact the profitability of my company every day in modes ranging from jet aircraft to ships to parcel delivery vans. Our customers see it too and feel it the same way.

Transportation analysts also study energy costs as they relate to transportation, but with an eye toward evaluating threats and opportunities in stock investment.  One of those analysts also happens to be a reader of freightdawg.com and passed me a link to a particularly interesting document published by the American Petroleum Institute. API is a national trade association for the Oil & Gas industry, and acts as an advocate for the Industry in total.  The document is entitled "The Truth About Oil and Gasoline: An API Primer" (PDF file).

The API document discusses the current oil & gas markets, R&D efforts, industry investment and use of capital as well as the economic influences on world markets. Generally it provides deep background on just why oil prices are where they are. I find it a bit of an apologist for the industry, but that's the role of an industry association.  It is excellent deep background in understanding the impact of oil & gas on the US economy and well worth a read.

Eric

Add Freightdawg.com to your social bookmarks!

Bad Day at the Office for Kalitta

As soon as I saw this story, I knew it would take off all over the blogosphere. A slow news Sunday combined with a jumbo jet crash in Europe will do that.

Such is the case with the aborted take off / wreck that was Kalitta Air's B747-209F, N704CK from Brussels, Belgium to Bahrain on May 25th.

This Boeing 747-209F started life in the spring of 1980.   At Boeing, she was construction number 22299.  Ordered by China Airlines, she first flew commercially in July of 1980, registered in China as B-1894.    She flew for 23 years for China Airlines before being sold to Kalitta Air in 2003. Flying for Kalitta,  the venerable bird flew from the US to Europe and onward to the Middle East as part of Kalitta's all cargo operations.   Many of which operate for the US Government on charter.

November Seven Zero Four Charlie Kilo, trundled down Brussels Zaventem Airport (EBBR) runway 02 around noon European time, (GMT+1) bound for Bahrain. Midway down runway 02 the air crew heard a loud bang,and prepared to reject the takeoff.  Runway 02 is shorter than the others at EBBR by as much as 1000 ft.   The result was an aborted takeoff with the aircraft coming to a stop some 300 feet after the end of the runway.

Charlie Kilo broke her back in 3 places in the resulting crash. Fortunately there was no fire and the 5 member crew escaped with minor injuries.  Having done a little research for this article alone, the spine break of Charlie Kilo is a bit weird.

The flight was loaded with 76 metric tons of cargo.  at least some of which was diplomatic, including diplomatic "pouch" traffic and an ambassadors automobile.  So far there is no report on the condition of the cargo, or its further disposition.

Local Belgian authorities have campaigned previously to have runway 02 shut down due to its proximity to local communities.  No doubt that effort will now be renewed.In the meantime, Kalitta's 18 plane fleet of 747's is down one airplane.

Eric

Add Freightdawg.com to your social bookmarks!

Mercy Corps Gives Aid In China and Myanmar

One of the things my company does that makes me very proud is it's involvement in emergency and disaster relief.

DHL has a huge global logistics network and the company has never been shy about using it to help those in need.  DHL people also respond in the form of our Disaster Recovery Team (DRT).  The DRT consists of a highly organized group of DHL employees who deploy to the disaster region and then distribute food and supplies to those in need in conjunction with local authorities.   The US DRT team has deployed for Hurricane Katrina, the earthquake in Peru and other disasters.  DHL has other DRT teams in Europe and in Asia to respond on a global basis.

Such is the case in Myanmar and in China. Mercy Corps is a highly respected international aid charity.   Based in the UK, Mercy Corps is involved all over the world in assisting our fellow man in need. 

DHL assisted Mercy Corps in shipping 9 tons of food and materials to Myanmar on DHL Express aircraft. Additionally, DHL will help stage the goods for distribution in the region from company controlled facilities in southeast Asia.

Mercy Corps is currently accepting donations for humanitarian assistance to both cyclone and earthquake survivors. Mercy Corps and reputable local partner organizations will monitor distribution of donations.

HOW YOU CAN HELP:
Mercy Corps Myanmar Cyclone Fund - or - China Earthquake Fund
Dept NR, PO Box 2669 Portland, OR 97208 
www.mercycorps.org - or - 1-800-852-2100

Eric

Add Freightdawg.com to your social bookmarks!

Stocks: Betting on Dry Bulk Shipping

The article below is clipped from thestreet.com.  Simon Constable points to reasons why investing in the bulk carrier shipping market is a potentially profitable thing.

Specifically Simon points to recent disasters in China, credit crunch and a fuel demand for coal as reasons why to invest. Iron ore is needed to make steel.  China has an insatiable appetite for steel to grow its economy and infrastructure. The earthquake there has now increased demand as reconstruction will have to take place. Coal is a primary fuel for electrical generation, and also for gasification to create liquid fuels such as Dimethyl Ether. DME can be used as a fuel or to create plastics etc.

(mini-rant mode on)

What bugs me though is how little some analysts actually know about the shipping business. References to dry bulk cargo vessels as "cruisers" gives me some pause to wonder whether this guy did much homework beyond macro stock trends and potential linkage between transportation and cargo demand. 

The analysts I know talk to people in the business daily.  I wonder whether that happened here. Thats not particularly unique to thestreet.com.  Motley fool does the same thing.  Even the title of the article below makes me wonder if there is understanding of the differences in demand for oil tankers, bulk carriers, container ship charters, etc.  All qualify as "shipping".

Shipping charters typically follow sales transactions by about 4 to 6 months.  Vessels for charter have to be deployed, then loaded etc. So a delay in a seasonal market, or a change in demand slowly shows up in the demand for shipping space. Simon gets this pretty much right, but what about availability of the right kinds of ships at the right size to meet spot markets? That is the difference between which company will be able to meet the spot demands of the global economy and natural disasters.

My experience is that analysts typically get the big picture right, but the devil is often in the details.  It is there that they often lose focus and why people actually "in the business" take analysts with about a 14 lb. grain of salt.   On that note, its wise to do your own homework.

(mini-rant mode off)

clipped from www.thestreet.com Three Reasons to Bet on the Shipping Sector The dry-bulk shipping stocks have been good to investors this year. But things stand to get a whole lot better. Why, when things are up so much, can they stand to go even higher? There are three reasons: coal, the earthquake in China and the credit crunch. First, a quick review of how things got to this point. Since I first highlighted the sector in late January, shares of DryShips (DRYS - Cramer's Take - Stockpickr), Navios Maritime (NM - Cramer's Take - Stockpickr) and Eagle Bulk Shipping (EGLE - Cramer's Take - Stockpickr) are up 73%, 42% and 52%, respectively. These stocks, the "Class A" acts in the dry-bulk shipping sector, have followed the roller-coaster ride in the cost of freight rates. Last November the Baltic Dry Index, which measures the cost of moving bulk commodities such as ores and grains, started plunging from a November high of 11,039 down to a low of 5,615 -- a 49% drop -- on Jan. 29.

Add Freightdawg.com to your social bookmarks!

I asked for Racehorses...and this is what I got!

I'll admit that I sometimes get a little "far afield" when it comes to being a pure freightdawg. I'm simply fascinated by transportation of all kinds of things. Such was the case when I recently posted an article/request for an expert to come forward to discuss and write about transportation of racehorses. So far, nobody has done this, which is to my disappointment. But perhaps I can guilt somebody into it.

However, readers here are an eclectic bunch so periodically I get egged on by an editor or two from a larger trade journal to cover something a little wacky that perhaps they themselves wouldn't touch (perhaps because of better judgment or a more talented writing staff...)

Such is the case this week, when one of my favorite readers from the big boys read my request/article on racehorse transportation.   Figuring he can get me to publish ANYTHING... he referred me to the article below which covers "how not to ship a whale".  It's an interesting excerpt from the book "Operation Orca" on the early days of studying and collecting  "Killer Whales" from the Pacific Northwest and the shipment thereof to various places such as southern France for exhibition.   Nowadays, such practices would be considered politically incorrect, and probably (definitely?) illegal without a bunch of licenses.  In the late 1960's none of that was required.  (In fact, in the Northwest, I believe the locals thought of Orcas as varmints and shot at them.)

UPS once made a big deal of shipping the whale sharks that were to be displayed in the Georgia Aquarium from Taiwan to Atlanta.  Now that I think about it, there may be a tie in to racehorses yet since Big Brown was named after that other Brown company that plays a big role in the economic success of Louisville Ky.

Now one of you lazy experts who truly knows about moving animals give me an email.

clipped from thetyee.ca TheTyee.ca [Editor's note: The book Operation Orca (Harbour) recounts human efforts to save Springer in Puget Sound and Luna near Gold River from a lost whale's slow death. In this third of four excerpts on B.C.'s history of whale wrangling, Francis and Hewlett explore more wacky tales of fishermen, showmen, and a pair of unlikely teenagers trying to acquire orcas for public display.] Pender Harbour is a complex jumble of islands, coves and lagoons on the Sunshine Coast about 75 kilometers northwest of Vancouver. The whales first appeared in Gunboat Bay at the head of the harbour, where they were discovered by local fisherman Sonny Reid. The pod exited the bay despite Reid's attempts to contain them but they returned the next day to Garden Bay, another arm of the harbour. Reid and some other fishermen managed to drop a net across the entrance to the bay and trap one of the whales, an adult male almost five metres long...

Add Freightdawg.com to your social bookmarks!

Space Entertainment: Virgin Galactic

Google Zeitgeist is an instant picture of what people are searching for on Google all over the world. Since Google is the most popular search engine on the Web, it's an interesting way to gather data on what people are looking for.  The video below discusses Virgin Galactic's plan to create space tourism.  Dr. Patrick Dixon is a medical doctor and popular futurist that we at Freightdawg.com have covered before.

Dr. Dixon introduces Stephen Attenborough of Virgin Galactic below. Mr. Attenborough is responsible for attracting passengers to future launches.

(Note: Some corporate proxy servers ban video from youtube.com. If you see white space below...you may be on such a network.  Please revisit from home or a connection that does not go through your company VPN.)

 

Virgin Galactic space vehicles will take people onto short trips into space in the ultimate tourist adventure but also raising questions about use of resources in a world concerned about global warming. 

The spacecraft can take 10 people on two trips a day. Carried up to around 70,000 feet like a conventional aircraft, the vehicle is released and then shoots into space in a 90 second rocket powered burst.  The rocket motor itself can be turned off and on since the rockets fuel consists of rubber pellets and nitrogen dioxide - both stable by themselves, allowing the rocket engine to be turned on and off. 

The Virgin Galactic space vehicle re-enters the atmosphere at a slower speed than the NASA space shuttle, and from a lower height. It flies down to land at a conventional airport using own wings and without sustaining massive temperature issues that have made NASA flights so challenging. 

A seat on a Virgin Galactic space vehicle costs $200,000 for a trip lasting a few minutes in space. All seats for the next year or two are already sold out!

Eric

Add Freightdawg.com to your social bookmarks!

Wanted: Guest Writer on Thoroughbred Horse Transportation

Here at freightdawg.com, we write about all kinds of transportation and supply chains. However, the "freightdawg" doesn't know squat about race horses. After enjoying both the Kentucky Derby last week and the Preakness today (check out the Preakness blog as well!), I found myself wondering just what specialized transportation is required to move these expensive, and no doubt temperamental animals around. I know FedEx has a specialized business unit that handles international transportation of race horses.  But what else? 

I'd like to invite another freightdawg to write an article that can highlight what's involved in race horse transportation. Anybody who is well qualified can write me at ejoiner2@gmail.com. I'm looking for someone who knows the thoroughbred race horse transportation business and can write at a strategic level. This is an opportunity to be an ambassador for your industry. Note: the gig pays nothing, but your name will be in lights across the web. This kind of specialized content always gets linked.

Eric

Add Freightdawg.com to your social bookmarks!

Driver Leasing Supplements Logistics Demand

My good friend and fellow freightdawg, Scott Sigman, works for Vanguard Services in Indianapolis. Vanguard is in the business of driver leasing to logistics companies who need to flex their workforce to meet demand.

The article below appeared in the Indianapolis Star today and highlights Vanguards business model. Scott wrote an excellent piece on this subject for Freightdawg.com some time ago.

I've been fortunate lately to see several current and former colleagues with their name in lights lately. Vanguard operates one of the larger driver leasing programs in the country.  For private fleet operators who need to flex for seasonal peaks, Vanguards services are potentially very valuable.

(And ...Yes, I changed the highlights to red.  I didn't like the goth look of all that black!)

clipped from www.indystar.com Vanguard Services in the driver's seat Company leases workers to meet rising demand in logistics industry By James Harper / Star correspondent Posted: May 9, 2008 More than 724 million tons of freight pass through Indiana -- the fifth-busiest state for commercial freight traffic every year Somebody has to deliver the goods. As the nation's third-largest driver-leasing company, Vanguard Services has added customers, opened an office in Nashville, Tenn., and launched a driver-on-demand service to meet that need, said Scott Sigman, the Indianapolis-based company's director of business development. Vanguard's driver work force now totals more than 1,100 men and women at its Far-Northside headquarters and four regional locations that also include Dallas; Allentown, Pa.; and Greenville, S.C. "We provide the detailed work of recruiting and certifying professional drivers," enabling customers to focus on their core revenue- generating business areas, said Jim Malarney, Vanguard's president. "From the beginning, we have tried to instill two basic core values in our work force -- safety and customer satisfaction -- and these values have served us well in building a long-tenured, successful business ," he said. Among Vanguard's secrets of success in filling this niche, Malarney said, are its stringent employment standards -- only one of eight drivers interviewed is hired -- and its low turnover, which has allowed it to nurture decades-long relationships with customers such as Bridgestone-Firestone, Pepperidge Farms and General Electric. John Rigel, 44, who has been driving for 18 years including the past two for Vanguard, appreciates the shorter trips to neighboring states like Ohio and Illinois, which allow him to spend more time at home with his wife and seven children. "It's stable. They've been fair with me," said Rigel, an Acton resident. "I don't have to drive constantly . . . so I get to watch my kids grow up." Bulk-distribution warehousing centers in Indianapolis, Plainfield, Whitestown, Mount Comfort and elsewhere have helped with driver-recruitment efforts, Vanguard's Sigman said, because it allows for those shorter regional trips, rather than long cross-country routes. Experienced drivers for Vanguard can earn annual incomes of $30,000 to $80,000, Sigman said. However, the TDL industry still faces a driver shortage, he added. "There is a shortage of drivers," agreed Clayton Boyce, spokesman for the American Trucking Associations, though he couldn't give a specific number. He said that shortage has eased, however, because of to a steady decline in freight since January 2007. One solution to the driver shortage has been an effort by companies such as Vanguard to work with local educators to get the word out to 18- to 21-year-olds about employment opportunities. The Supply Chain Orientation and Research Education pilot program encourages interest in TDL and manufacturing. "The ultimate goal is to prepare them for college-level courses that will lead to future careers," University of Indianapolis professor Leslie Gardner said of students in the SCORE program. That includes on-campus classes for high school seniors to help them earn college-level credit toward a TDL-related degree, she said. Jim Hopkins, president and chief executive of Laibe Corp., an Indianapolis well-drilling company, has worked with Vanguard since 2005. "Originally our manufacturing personnel were handling customer deliveries, and that consumed too much production time while they were on the road," Hopkins said. "Vanguard is now handling all of our deliveries. They are extremely reliable and very responsive." Greenwood resident Mel Lawson, 74, is semi-retired now, but said he has driven for 49 years -- 34 of them for Vanguard. Vanguard is "the best company I've worked with," he said Wednesday, as he prepared to team up with Rigel to drive two well-drilling trucks from the parking lot at Laibe to Baltimore for shipment overseas. "(They) are just good people. It's an overall good working relationship between the drivers and the company."

Add Freightdawg.com to your social bookmarks!

Airlines: 707's littlie Brother Gets Bigger

Boeing published a press release yesterday on the delivery of the first Boeing 737-900ER aircraft to GE Commercial Aircraft Services.  GECAS will lease the planes to Futura International Airways.  These two airplanes fly farther and more efficiently than all other 737 aircraft.

What is "deja vu" interesting to me is that the B737-900ER looks like and has similar lift and range capabilities to the original 707. The first B707-120 carried 179 passengers.  The 737 started as a shortened, smaller range derivative of the 707 but now carries more than 200 passengers on flights from Seattle to Miami.

When I worked for Delta in the late 70's loading airplanes, we used to call the "new" 737-200, the flying football because of its short, football like shape.  Advance the clock 25 years...and these same 737 derivatives look like 707s but with 2 engines! Thats very interesting to me because it continues to validate the beauty and engineering marvel of the original 707 shape as well as Boeing's understanding of what the potential product size should be for a given aircraft range.

An aerodynamic shape remains constant, but what happens with the engine efficiency and the avionics inside is dynamic.

clipped from www.boeing.com SEATTLE, May 06, 2008 -- The Boeing Company [NYSE: BA] last week delivered Europe's first two Next-Generation 737-900ER (Extended Range) airplanes to GE Commercial Aviation Services (GECAS) and its leasing customer, Spanish carrier Futura International Airways, based in Palma de Mallorca. "We are very satisfied to take delivery of the first Next-Generation 737-900ER for Europe through our lessor GECAS," said Román Pané, CEO of Futura. "Our experience in operating the 737 will be expanded with this new aircraft model, allowing us the longest range possible for our international fleet." Boeing launched the 737-900ER program in July 2005. The 737-900ER, the newest member of the Next-Generation 737 airplane family, increases the capability of the 737 by carrying more passengers and flying farther. The European Aviation Safety Agency (EASA) certified the 737-900ER April 22.

Add Freightdawg.com to your social bookmarks!

NASSTRAC Recognizes Regan and Burba

It's great when two people you know personally receive well earned industry recognition for career leadership and personal commitment. Such is the case with Mike Regan, CEO of Tranzact Technologies and Al Burba, VP of Field Sales for DHL Express.

NASSTRAC recognized both at their annual Logistics Conference and Exhibition in Orlando on April 29th.  Regan was recognized as "Regular Member of the Year" while Al Burba was recognized as "Associate Member of the Year".

I serve with Mike Regan on the Board of Directors of the American Society of Transportation & Logistics and know him to be a visionary leader and substantive influence on the direction and strategic value of supply chain and logistics.

Al Burba is a great friend and colleague of mine at DHL and a superior talent for our company. Al's energy and customer care are well known. He teaches his troops by example and has built a reputation for quality in every part of the business he has touched.  Al was a major influencer on the NASSTRAC carrier advisory council for the previous two years. 

These are good guys getting well earned recognition. Congratulations Mike and Al!

clipped from www.trafficworld.com MINNEAPOLIS, MN - NASSTRAC recently announced that Mike Regan, CEO and chairman of Tranzact Technologies, has been named the 2008 "NASSTRAC Regular Member of the Year." Each year, this honor is awarded to an individual logistics executive who has demonstrated personal leadership, commitment, and dedication to the industry as well as to the association. NASSTRAC provides advocacy, education, provider relations, and networking for professionals involved in all areas of transportation, ranging from full truckload and LTL to containerization and global logistics. "As chairperson of the NASSTRAC Advocacy Committee, Mike is very well-known and has been an icon in our industry," said Gail Rutkowski, NASSTRAC's current chairperson. "However, this award is being presented for all of the things he has done behind the scenes. Two years ago, NASSTRAC made a commitment to aggressively devote significant attention to transportation advocacy issues.Mike has worked tirelessly to make sure the shippers within NASSTRAC not only know what the issues are, but also that they clearly understand them." In addition, NASSTRAC also announced that Al Burba, vice president of field sales for DHL Express, is the recipient of the 2008 "NASSTRAC Associate Member of the Year." Each year, the association presents this award to an individual from the service provider community who has shown leadership, continued commitment to the industry, and support of NASSTRAC. According to Rutkowski, Burba has been an active member of the carrier advisory council for the association for two years and has put forth significant energy in encouraging productive dialogue between shippers and service providers while assisting NASSTRAC in expanding membership into all modes and market segments of transportation.

Add Freightdawg.com to your social bookmarks!