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

US CBP Requires New Seal for Inbound Containers

US Customs and Border Protection (CBP) will mandate use of container seals that meet ISO/PAS 17712 standards beginning October 15th, 2008 (date of cargo arrival).

The ISO/PAS 17712 type seal, meets CBP standards for unique numbering, strength, durability and tamper resistance.  They will be required on all US bound containers except Open Tops, Flat Racks and ISO tanks, as well as containers to be unloaded for inbound transport to Canada or Mexico.

The requirement for the special seals was established by the Safe Port Act of 2007.  Full text of the requirement can be found at the following site in vol. 73, No 159 of the US Federal Register dated 7th August, 2008.   

While the ISO/PAS 17712 type seals are widely used today, supply is expected to be limited as enforcement date nears.  Shippers and consolidators are should be looking to obtain them now.

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South American Air Cargo Challenges

I was in Mexico a couple of weeks ago pursuing business opportunities in Mexico as well as the rest of Latin America.  The Mexican link is important because of all the commerce done in Latin America, Mexico accounts for approximately 50%.

The potential for the rest of Latin America however is huge and growing.  Air Cargo World has a great article clipped below which high lights the markets opportunities and challenges.   LAN Chile has invested the most in terms of cargo capacity, but still suffers from an imbalance between north and south cargo mixes. Computers, auto parts, industrial equipment and consumer goods all head south, with produce and floral goods headed northbound.

LAN is expecting delivery of some of the first Boeing 777-200F freighters.  These present an opportunity to link South America directly with Asia based on long range freight movements.   Lufthansa also has designs for the Latin market based on their joint venture with DHL called Aerologic. 

The biggest opportunities coming appear to be in supply chain, where only Chile measures on a modern scale.  Other Latin countries lack both infrastructure and market sophistication to execute supply chains at a faster pace.

clipped from www.aircargoworld.com Southern Cargo Exposures South America remains largely untapped in terms of air cargo potential, but there are developments worth noting Michael Mackey Air cargo is developing in South America - albeit unevenly - despite myriad problems it faces. Chile's LAN Cargo occupies the pole position at the moment where its' emphasis is on further growth, having just announced the creation of a new cargo affiliate airline in Colombia. The carrier has nine 767-300 freighters and two wet-leased 747-200 freighters. These aircraft carry around two-thirds of the carrier's total cargo with another third being moved as belly cargo within the passenger fleet. What they're carrying is an interesting mix. Inbound, the big item is spare parts, mostly automotive as well as laptops, printers, mobile phone and mining equipment. Outbound, it carries perishables: fruit, flowers; salmon and spare parts from Brazil; leather out of Argentina; and horse meat bound for France. This imbalance, while it concerns LAN, does not deter the carrier. LAN draws a historical parallel to show how the airline is progressing. "What we want to do is link (South America) with the world. Five years ago it was with North America," said Tomas Silva, Lan Cargo´s vice president for global accounts and alliances. Nor is this wishful thinking as the carrier will have the necessary lift, starting with two 777 freighters in January and March 2009. A third aircraft will follow in 2011, a fourth in 2012. Proud though they are of these developments, LAN is less effusive on which routes they will fly, although the general feeling is it will be Miami as well as São Paolo, Buenos Aries and Santiago. Silva said most flights would probably touch three cities.

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Freightdawg for President?

Be afraid...be very afraid.  

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Finally: Somebody did some Homework

DHL's proposed air line haul deal with UPS has caused considerable controversy since its announcement in May. Understandably, there's been a lot of concern from the citizens of Wilmington, Ohio, where DHL's hub is located, as well as employees, politicians, union officials and DHL customers. 

Much of what has been reported however has been inaccurate, or at the very least, lightly researched regarding what the history and business impact of the DHL/UPS deal is.  So much so that it's become a political football.  That's no surprise in a federal election year and in a politically important state like Ohio.  The situation is very serious for all concerned, so accurate information becomes all that much more important.

Having said the above, I want to point to the factcheck.org article that appeared in Newsweek this week. This article has more correct information than almost everything else I've read. Both the Obama and McCain camps would do well to read it.

Factcheck.org a nonpartisan, nonprofit, "consumer advocate" for voters that aims to reduce the level of deception and confusion in US politics. The Annenberg Political Fact Check is a project of the Annenberg Public Policy Center of the University of Pennsylvania.

I highly recommend reading the complete article!

clipped from www.newsweek.com Distorting the DHL Deal An AFL-CIO flier and Obama campaign ads say that McCain cost Ohioans 8,000 jobs. We say that's a distortion of the record. Joe Miller | factcheck.org Ads from the AFL-CIO and the Obama campaign claim that McCain is partly to blame for the loss of more than 8,000 jobs in Ohio. They paint a false picture. There's at least some truth in both ads: German-based DHL announced a deal that could result in 8,200 lost jobs in Wilmington, Ohio. And McCain did in fact oppose an amendment that would have kept DHL from buying Wilmington-based Airborne Express. McCain's campaign manager, Rick Davis, was also a DHL lobbyist charged with easing the merger through the Senate. But the ads go too far. Some statements about McCain are misleading and some of the inferences the ads invite are unsubstantiated: The ads charge that McCain opposition to a 2003 amendment helped DHL and amounted to turning his back on workers. That's misleading. McCain said he opposed a version of the amendment because it was a special project inserted into an unrelated bill, not to help DHL. And the Teamsters union praised the merger at the time, saying that it would lead to more jobs. And at first, more jobs indeed followed. The ads also imply that the DHL merger is a direct cause of the job losses in Ohio, which we find to be both unlikely and unsubstantiated. Airborne Express had laid off 2,000 employees before the merger, and analysts at the time said that the struggling carrier would need to make expensive investments in its international infrastructure to remain competitive. Analysis The AFL-CIO and presumptive Democratic presidential nominee Barack Obama are blaming John McCain for the loss of more than 8,000 jobs in southwestern Ohio. The AFL-CIO mailer is the most explicit, saying that "McCain helped cut a deal that sent over 8,000 jobs to a foreign-owned company." Obama's television ad, which began airing on Aug. 14, charges that "John McCain helped pave the way for foreign-owned DHL to take over an American shipping company." An Obama radio ad, which began airing in Ohio over the weekend, repeats the message that McCain "used his influence in the Senate to help foreign-owned DHL buy a U.S. company and gain control over the jobs that are now on the chopping block in Ohio."

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"No Way BA-AA"

For years, Sir Richard Branson had the slogan above painted on the B747's of Virgin Atlantic Airlines. Virgin Atlantic opposed the tie up of American Airlines and British Airways because Virgin believes that such a union would dominate the US-UK passenger market.

Now that the Open Skies agreement is in place between the EU and United States, such a tie up is now even more possible than ever.   Fuel costs and a weak dollar make a joint venture very interesting.   

American is the USA's largest air carrier. BA is the largest in Europe. A JV between them would create a very powerful alliance in the trans Atlantic market. Virgin rightly believes that such a tie up could damage them competitively.

Given the competitive threat, Sir Richard has written to US Presidential candidates, Senators Barrack Obama and John McCain, looking for relief.  In my opinion, neither candidate either understands the issue nor will be able to do much about it in reality. Obama in particular has shown little in terms of international market understanding or concern.

Sir Richards argument is that the Open Skies agreement hasn't created much in the way of increased competition nor lower prices.  My thought is that's not so much the fault of the Open Skies agreement as it is a factor based on fuel costs and weak dollar.

British Airways and American have almost half of all takeoff and landing slots at London's Heathrow airport. BA/AA will likely file an application this week for permission to coordinate rates and schedules and share revenues and frequent flyer details, on their networks. That's a pretty specific threat to competition.  British Airways is prepared to sacrifice US routes to make this deal happen.

Doubtless Virgin's westbound flights are full and money is being made, but on the eastbound flights from the USA, where tourists are not going to Europe in great numbers, competitive factors are being felt.  Virgin Atlantic is right to fear a BA/AA tie up, but as long as Virgin Atlantic continues to offer great service at a fair price with 25 year old blond welsh flight attendants, I think Sir Richard should focus on his brand value at the same time he fights a legal battle.   

This battle will be won with the passengers, not with the politicians.  My personal opinion is that both these Presidential candidates are weak.  I think Sir Richard better be placing covering bets in other places to make his point.  Competitive quality of service and value for ticket prices will win the day.   

clipped from news.bbc.co.uk

Virgin challenges BA's US tie-up Sir Richard Branson has written to both US presidential hopefuls, warning against allowing a merger between British Airways and American Airlines. Such a deal would damage transatlantic competition and mean customers lost out, the Virgin Atlantic boss claimed.BA declined to comment, but told the BBC that it would make an announcement on the tie-up within the next few days. Reports say BA would be prepared to sacrifice "hundreds" of transatlantic flights to allow the deal to go ahead.The carrier has tried to secure a pact with its US rival twice before but has so far refused to meet US authority demands that it gives up a chunk of flight slots. However The Mail on Sunday says that BA now sees this as a price worth paying, and reports that the airline will make the offer to US Department of Justice officials this week. BA also believes that relaxations in regulations under the Open Skies agreement may make this more likely. 'Red herring' With aviation fuel prices at record levels and spending on air travel slowing, airlines are looking for ways to cut costs. But in his letter to Senators Barrack Obama and John McCain, Sir Richard said that the solution to the problems of airlines "should not lie in an anti-competitive agreement which will inevitably lead to less competition and higher fares". Six routes from London Heathrow - including New York JFK, Chicago and Los Angeles - would be dominated by a BA/American Airlines merger, Sir Richard said. The argument that the competitive environment had changed with the Open Skies accord was "a complete red herring" he added, saying there had been no significant increase in competition and that ticket prices had not fallen.

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NOL Possible Buyer for Hapag Lloyd?

"Back in the Day", I used to work for P&O Containers, then P&O Nedlloyd.  After that, I spent some quality time at APL as well.  During those years, I often thought how well matched P&O and APL would have been for each other.

APL had unmatched transpacific presence, where P&O was weak.  Conversely, P&O had great European, African and South Asian markets as well as a very strong share of the Europe-Asia trades.  Alas, it never happened. Too bad because having spent time in both companies, it would've been a good cultural fit. 

Now, due to market forces, two other strong players may consider merging whose footprints could combine with similar market congruence.  APL and Hapag-Lloyd.

Hapag-Lloyd has always been an extremely well run container shipping company.  Hapag has had one of the best yield management systems in the business. This pricing and opportunity evaluation system gave Hapag a unique ability to look at customers from a global P&L perspective. That's something few container shipping lines have the true ability to do.  I recall competing with Hapag and thinking they could be aggressive simply because they knew their costs better than anybody else. They also knew the true value of a deal. 

"Combine that ability with APL's innovative capabilities in the retail markets and technology and you could have a global power to rival Maersk in every way."

What is intriguing is that Hapag has never invested in 3PL logistics services.  It has always deferred to its European forwarder customers for those services and steered clear of that market.  Hapag-Lloyd is a primary carrier for most of the truly global European Forwarders.  In exchange it stays out of the logistics business.   If Hapag gets married to APL, that could change.   Should this merger occur, look for this to be a big factor in 2009 ocean contracting for the big NVOCC's.  Both groups will need to define their turf and working relationships in a revised market.

APL Logistics and Maersk Logistics take two separate views related to their container line brethren.   Maersk Logistics has always been an unabashed supporter of the baby blue ships.  They will book freight as directed if customers have other ocean contracts, but the default answer is always BLUE. Maersk Logistics is a freight trap for Maersk Line.

APLL on the other hand has traditionally been pretty agnostic on this issue. If the customer has a contract and wants the freight split as directed, APLL always has done this based on customer wishes.  That never sat particularly well with the APL Liner management team, but that's how it worked in my time. This stuff will change with a merger with Hapag.

An NOL/HALO merger would strengthen both TUI group and diversify Singapore state investment company, Temasek holdings.  Thats good for the two mother corporations for the liner companies.  How the two companies would get along politically will be interesting indeed.   Hapag Lloyd and APL have unique cultures.  Those cultures don't merge as well as the P&O scenario that once was possible. This one will be interesting to watch.   

clipped from www.seatradeasia-online.com Hapag-Lloyd and NOL in merger talks    Singapore: Singapore state investor Temasek Holdings and German shipping and tourism  group TUI are in talks to merge their shipping operations, the Financial Times reported on Wednesday, citing unnamed sources. Temasek could put its 68 percent stake in Neptune Orient Lines into TUI unit Hapag-Lloyd and take a share of TUI, giving Singapore about 23 percent in the enlarged group, the report cited people close to the talks. Combining Hapag-Lloyd and NOL would bring together the U.S. and African routes of the German group with the Asian routes of its Singaporean rival, the paper said. Temasek could not be immediately reached for comment and NOL declined to comment on the FT report. "NOL 's policy is not to comment on market speculation," company spokesman Paul Barrett said.

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A380 Lands at JFK for First Commercial Flight

On August 1, an Emirates Airlines A380 landed at New York's John F. Kennedy Airport. The flight from Dubai to JFK was the first commercial A380 flight to touch down in the United States.

Emirates only took delivery of the new aircraft on July 28th in Germany. These are heady days for both Airbus and those airlines who are emerging as early adopters of the A380.

Check this page out on Emirates and the A380.  Flights from New York to Dubai will take place on Sundays, Wednesdays and Fridays as flight EK202.

clipped from www.usatoday.com Airport workers crowded areas near the taxiway to catch a glimpse of Emirates A380 after it landed at New York's JFK Airport this afternoon. The flight was A380's first-ever regularly scheduled commercial flight to the USA. Following the flight, Emirates President Tim Clark addressed a crowd of journalists and airline VIPs that were on hand for the event. Clark says it is "very likely" that Emirates will eventually fly all of its New York flights on the A380 superjumbo. He says other U.S. cities are likely to be added by Emirates in the coming years, adding that cites such as Chicago, Atlanta, Dallas/Fort Worth and Washington would be among a list of obvious possibilities. Here's one picture from today's ceremony, but come to Today in the Sky back Monday to see more pictures from the event, including shots of the jet's much-ballyhooed showers. Also check back on Monday for additional write-ups from the A380's Friday debut.

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Dreamliner Update

Jon Ostrower's flightblogger has a great article updating the construction of B787 Dreamliner 4.  This is the fourth test aircraft for the 787 program. Jon's got some good pictures too. 

Flightglobal.com is a great site with several commercial aviation related blogs. Very good stuff.

clipped from www.flightglobal.com Two 747s touched down yesterday evening at Paine Field in Everett carrying the nose section and center fuselage for Dreamliner Four, marking the commencement of the next phase of assembly of the flight test 787s. The center fuselage, which spent almost eleven months in Charleston, arrived with a greater completion of assembly than was previously forecasted, sources confirm. Delivery was supposed to take place in late June, though damage sustained on the center fuselage forced a re-evaluation of Boeing's schedule to both repair the damage and continue to reduce the amount of traveled work flowing to final assembly in Everett. When Boeing outlined its revised schedule in April, the beginning of final assembly of Dreamliner Four was identified as a significant program milestone. Boeing has lost roughly five weeks of assembly time on Dreamliner Four, though the reduction in traveled work may end up putting Boeing ahead of where it otherwise would have been had the section shipped on time.

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Skip Caray: Death of a Baseball Icon

This blog is about logistics and I try to stay on topic, but I love baseball. In particular, as an Atlantan, I have always loved the Braves. Today was a very sad day with the unexpected death of Atlanta Braves legendary announcer Skip Caray.  Friends, this loss hurts.

As a kid I remember listening to Braves games on the radio.  First with Milo Hamilton in the late 60's and early 70's, later to go on to the Houston Astros. Hamilton announced the famous 715th home run of Henry Aaron in 1974. I was at that game with my Dad and brother. Interestingly, I later went to high school with Hank Aaron's sons, Henry and Larry.  Both were great athletes.

In 1976 Caray came to Atlanta to announce games with the Atlanta Hawks basketball team.  He subsequently joined the Braves announcing team for WTBS, the Super Station, who would make the Braves "America's team" through nationwide cable broadcasts. In those days, you only had WOR, WGN and TBS as the big independent cable TV stations. That made the Yankees, Braves and Cubs big teams for national cable audiences.   With Satellites, it also put the Braves on TV in Latin America, which would also serve them well later in signing Latin American players like Andruw Jones.

Skip Caray came from good genes.  His father, Cubs broadcaster Harry Caray, was an icon on his own. Later Skips kids Josh and Chip, took up the microphone as well in the Braves organization and elsewhere.  The thing about Skip, at least in the early days,  was that he was a major league party boy. He caroused his way to legend in the 70's and 80's in Atlanta. That is, until his liver started to fail him in the 1990's and he stopped drinking. Unfortunately the toll on his health was already under way. 

As a sales rep in the 1980's and 90's I spent a lot of time in my car driving around the south. I came to love the Braves and the voices that brought their games to me as I drove around in late September in places like Muscle Shoals, Alabama and eastern Tennessee.   I loved Caray's pregame show. I think Skip himself hated it.  Some Gomer from Sandersville or Conyers or wherever, would call in and ask the most inane questions. 

Lets just say Skip Caray didn't suffer fools well. A kid asking about the infield fly rule, or a middle aged woman asking about Tom Glavine's hang nail were both likely to be met with derision or at the minimum a sarcastic wit. Caray's intellect and his tongue were directly connected, sometimes to his detriment. 

The fact that Skip had a periodic hangover didn't always help that connection.  Nevertheless, the pregame show became very entertaining because you KNEW that when some fool dialed in a dumb remark, Skip was going to go "off".   Believe me, when you are half way home on a long drive,this stuff takes on a baseball version of Jerry Springer.   Later Pete Van Wieren would take over the pregame show.  Pete was much more politically adept at handling fans loving, but stupid questions.

For pretty much all of my youth, the Braves were losers. Bad losers. Awful losers. To be their announcer made you (de facto) also a loser.  For the longest time in the mid 80's, Skips voice reminded me of losing.  Soon, I thought he was a loser.  I hated the guy. Then in 1991, something magical happened. Some young pitchers showed up, named Smoltz, Glavine and (poison) Avery as well as some new leadership with a third baseman named Terry Pendleton. My family was in the middle of relocating from Charlotte to Atlanta that summer.  I specifically recall turning on a Braves game in Charlotte just to see what the Atlanta Losers were doing.  I was going to reconnect before moving and figured I better know how bad the Braves were... Holy SHIT! I was surprised, something was different. These guys were actually good.

On moving back to ATL, not only did I get into the Braves, but I also started collecting baseball cards. (much to my wife's disagreement.) Suddenly, the Braves were cool.  They were winners.  They had discovered the magical key to the chemistry of winning. The Bravos went on to the World Series that year only to lose to the Minnesota Twins in Game 7. What happened from there was 14 years of at least divisional championship as well as the 1995 World Series championship.  Throw in some gold gloves, and a few Cy Youngs when a fellow named Maddux joined the rotation.

Skip Caray and a broadcast team of Pete Van Wieren, Don Sutton and Joe Simpson were the backbone of that decade and a half.  I love all those guys.  Corporate schmucks may rearrange the broadcast teams, but we fans know who the real voices of the Braves brand are.

Skip Caray died in his sleep and is survived by his wife Paula and his children, who continue the Caray baseball announcing tradition.  Skip will be missed by his family as well as his baseball team, fans and anybody who knows anything about baseball. 

I only have one thing to add on the life of Skip Caray.  Listen to THIS.   It still gives me a major adrenalin rush. I believe it is one of the greatest moments ever in MLB history.

Nuff said.

Eric

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A380 Model Installed at London Heathrow

A friend of mine sent me a link to this video on the new A380 model installed at LHR this past July.  For years, London Heathrow sported an impressive British Airways Concorde model. Huge in appearance and an impressive representation of the top of luxury flying for Great Britain's biggest air carrier. Alas, Concorde is a museum piece now, doomed by economics and a fatal crash in France. So, it should be a happy thing that Heathrow should get a new model, this time an ultra modern Airbus A380. The A380 is the worlds largest airliner and is now (slowly) entering service with global air carriers.

What struck me as odd about the new model?  It carries the colors of Emirates Airlines. Heathrow is the home of British Airways, yet a foreign competitors livery dons the icon in front of the airport. Emirates is a fine global carrier and a primary buyer of the A380.

How ironic that a country such as England, which has a pioneering history in global transportation, would allow the prime real estate in front of London's main international airport to be occupied by a representation of a non British carrier.

I guess this comes down to the fact that Emirates has more money and (apparently) smarter marketers.

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