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Freight prevails in Transportation Bill Conference Report

Following months of bicam-eral and bipartisan negotiations, members of the Surface Trans-portation Conference Com-mittee have filed a Conference Report. The proposed two-year bill contains a number of provi-sions that place unprecedented emphasis on freight movement and its importance to the United States economy. Among the pre-scribed freight provisions, the bill contains two long-stand-ing priorities of the Coalition for America’s Gateways and Trade Corridors (Coalition): the continuation of SAFETEA-LU’s Projects of National and Regional Significance program (PNRS) and the establishment of a national freight policy.

“This compromise legisla-tion shows that Congress has been listening when we’ve made our case for supporting the sys-tems that move our nation’s

goods,” said Coalition Chair-man Mort Downey. “We see this as a good platform upon which future steps can be taken to fur-ther improve this critical net-work and its infrastructure.”

Other important features of the legislation include establish-ment of a national freight net-work, a national freight strategic plan, a biennial freight condi-tions and performance report, and prioritization of projects to move freight. Although most of the bill’s language is aimed at improvements for road freight, railway-highway grade separa-tions and intermodal connectors are listed as eligible projects for prioritized federal funding (Sec-tion 1116).

“We applaud the Conferees for their dedication to ensur-ing our nation has a compre-hensive surface transportation program going forward,” said

US Congress passes RESTORE Act, directs billions to Gulf Coast

Greater New Orleans, Inc. applauded Congress for passing the RESTORE Act as part of the Surface Transportation Extension Act, marking an important step toward restoring the Gulf Coast. The RESTORE Act dedicates 80 percent of Clean Water Act fines paid by BP for the Deepwater Horizon oil spill towards economic and envi-ronmental restoration projects in Gulf Coast states. The RESTORE Act is projected to create thousands of jobs and contribute signifi-cantly to the economic stability of the Gulf Coast region.

A report released in June by Greater New Orleans, Inc. and commissioned by the Walton Family Foundation states that coastal restoration projects, funded largely by the RESTORE Act, could generate 57,697 jobs across several industries within the first 10 years. The study, “Job Creation from Gulf Coast Wetlands Restora-tion,” found that such projects would create, on average, 29.54 jobs per million dollars of funding.

Coalition Vice Chairwoman and Chief Deputy Executive Director of the Southern Cali-fornia Association of Govern-ments, Sharon Neely. “This bill represents a milestone in freight planning and we look forward to working with Congress and the Administration to increase the efficiency and capacity of our nation’s multimodal goods movement network.”

Continuation of the PNRS program is critical to funding large, multimodal, and often times multi-jurisdictional proj-ects that optimize freight mobil-ity, especially at locations of national significance. Despite the conservative amount of money authorized by the pro-gram in this bill, maintaining this program in law will allow for future increases in funding.

In addition to the establish-ment of a national freight policy and continuation of the PNRS program, the bill also calls for an increased federal share of funding for road freight proj-ects and encourages the estab-lishment of state freight plans and state-level freight advisory committees.

“Through this bill, Congress has recognized freight as a prior-ity at both the national and state levels,” said Coalition Board Member and President and CEO of the Intermodal Association of North America, Joni Casey. “Our Coalition looks forward to working with state governments on the various initiatives and serving as a resource that bridges the local perspective to regional and national programs.”

NORTH ASIA TRADE

Quebec rail plan stirs hope, concern in Canada’s iron belt

Canada’s biggest railroad wants to build a C$5 billion ($4.8 billion) rail line to ship iron ore from isolated northern Quebec to port, a crucial link that could transform Canada into the world’s third-largest producer of steel’s main component.

Canadian National Rail-way Co’s ‘s 800-kilometer (500 mile) project, backed by Que-bec’s public pension fund, is still years away from becoming a reality. Indeed, the 2017 pro-jected start-up date looks ambi-tious, given the complexity of negotiations that lie ahead.

The junior miners needed to fill the rail cars want to keep a lid on transport costs, and some have even floated the idea of building their own rail line rather than signing on to CN’s plan.

The proposed railway also faces an intensive consultation process with governments and local native groups before work can begin. Assuming those talks are successful, construction over the rugged terrain would take three years to complete.

Stretching from the Port of Sept-Iles on the St. Lawrence River to north of Schefferville, on the border between Quebec and the province of Newfound-land and Labrador, the line will pass numerous mining projects in the Labrador Trough - a geologi-cal formation rich in iron ore.

There are already two rail lines in the region but their capac-ity is insufficient to meet demand from planned new mines in north-ern Quebec and Labrador.

The Quebec government says the region represents poten-tial private investments of more

than C$20 billion.The privately funded rail

project is just one piece of Que-bec’s far-reaching Plan Nord, a 25-year plan that targets C$80 bil-lion in public and private invest-ments to develop a resource-rich area of 1.2 million square km, roughly the size of South Africa, with mining, renewable energy and infrastructure.

The whole plan is conten-tious for Quebec’s aboriginal Innu people, who last week blocked access to mines and development-stage projects in the Trough in protest against Plan Nord, which they say will damage the environment and their traditional way of life.

Big Potential

For CN, the railroad could bring a huge boost to its annual revenue, said RBC Capital Mar-kets analyst Walter Spracklin.

“If the contemplated mines do come through, this could be upwards of C$2 billion in annual revenue for Canadian National,” the transportation analyst said.

CN needs to ship at least 75 million to 80 million tons a year for the project to be feasible. But Spracklin said his conservative estimate of 125 million tonnes translates into rail revenue of C$2.2 billion. In 2011, CN recorded C$9 billion in revenue.

“It’s not a slam dunk,” Spracklin said, pointing to heavy capital requirements, uncertainty around the planned mining projects and the sheer remoteness of the location. “It’s not like there was this gem of an opportunity out there for anyone (STIRS – continued on page 7)

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Canadian lumber: from zero to a billion in 10 years

By Leo Quigley, AJOT

In 2001 there was a long and nasty softwood lumber dis-pute between Canada and the U.S., and the resulting counter-vailing duties imposed by the U.S. on softwood lumber closed many of the mills in British Columbia and forced the Province of B.C. and Ottawa, in 2002, to explore other markets for lumber, particu-larly China.

Since that time the Asian markets, especially the Chinese market has grown gradually, encouraged by trade missions and delega-tions that were intent not only on establishing improved trade rela-tionships with the Chinese, but to demonstrate the advantages of wood as compared to cement as a construction material.

Now, a decade later, those learning initiatives and demon-stration projects are beginning to bear fruit and, last year, ship-ments of lumber to China; which were zero in 2001; climbed to over Cdn$1.0 billion or nearly a third of British Columbia’s lumber exports.

Reaching this milestone prompted the B.C. Government to issue a statement pointing out that: “the value of British Colum-bia’s softwood lumber exports to China jumped 60 per cent in 2011, surpassing the $1-billion mark for the first time. Since 2003, lumber exports to China have risen by more than 1,500%.

“Total softwood lumber exports increased by seven per cent last year to $3.8 billion. The United States remains the largest market for B.C lumber, accounting for almost $1.6 bil-lion of exports.

“Japan, the recipient of $648 million worth of B.C. lumber in 2011, is the third-larg-est market followed by South Korea. Exports to South Korea rose by 30% to $55.6 million, while those to India climbed 327% to $10.6 million.”

The statement said that since 2003, at the start of the joint provincial-federal-industry market development program in China, exports to that country have risen from $69 million to almost $1.1 billion in 2011.

“In spite of the global eco-nomic slowdown, it is expected that B.C. exports of softwood lumber to China will continue to grow in 2012 as the Chinese gov-ernment pursues its aggressive housing strategy,” the release said.

Much of this increase in lumber exports was due to con-tainerized lumber exports through the Port of Prince Rupert. Speak-ing at a Transportation Summit sponsored by the B.C. Chamber of Commerce in Vancouver June 5, 2012, Don Krusel, President and CEO of the Prince Rupert Port Authority told an audience of transportation executives that annual container exports at the Port of Prince Rupert jumped all the way to 233,000 TEUs in 2011; an increase of over 500% in two years.

Interestingly, the products that were exported in those con-tainers were primarily lumber

and wood products.Krusel said: “73% of the

containers exported through Fairview last year were lumber,

pulp, logs, and other wood products.

“This was at a time when economic condi-tions in the traditional U.S. market would have

dictated a disastrous employment story in BC’s interior,” he said.

“Would that have been the case without

the development of new port con-tainer capacity on the

North coast? I would sug-gest not.

“Although the U.S. will always be a critical market for Canada, the spotlight now is clearly on China and the emerg-ing Asian markets, which are now driving global economic growth.

“This is good news for British Columbia and Western Canada.

“But this good news depends on our ability to get our products to China and to other emerging Asian markets in a timely and cost effective way. To this end, the key objective of the Port of Prince Rupert is to facilitate this trade and unlock the economic opportunities it affords,” he said.

Yearly statistics at Port Metro Vancouver also showed increases in shipments of wood products (50%) and woodchips (57%) last year.

Speaking at the same Trans-portation Summit, Robin Syl-vester, President and CEO, Port Metro Vancouver, said container traffic through Canada’s West Coast is expected to double within the next 10 to 15 years and nearly triple by 2030.

“We expect an additional 4 million TEU’s of container capacity in both the Lower Mainland and Prince Rupert will be required to meet this demand.” “We have heard local government and communities say they want us to look at doing more with our existing terminals before looking at building a new terminal, which is exactly what we are doing with the Delta-port Terminal, Road and Rail Improvement Project.”

The Deltaport Terminal, Road and Rail Improvement Proj-ect are a series of improvements to the existing Deltaport Termi-nal at Roberts Banks to increase the terminal’s container capacity by 600,000 TEUs. The improve-ments will occur within the exist-ing terminal, road and rail

footPrint, with no Marine works

“However, even with improvements to existing termi-nals, Port Metro Vancouver will still need additional container capacity by the early 2020s.

“That is why we are plan-ning now for the proposed Rob-erts Bank Terminal 2 project - a multiberth terminal that could deliver more than 2 million TEUs a year, meeting anticipated traffic volumes into the early 2020s and beyond,” he said.

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Log exports to China resume Virginia, South Carolina deal involves six-month pilot program

By Peter A. Buxbaum, AJOT

Last month, a shipping con-tainer left the port of Portsmouth, Virginia destined for the port of Shanghai, China, an event which ended a 14-month ban on the export of logs from Virginia and South Carolina to China. The Chinese put the ban in place for hardwood and softwood logs from the two states in April 2011 after finding a worm, the pinewood nematode, that infects pine trees in a number of American log shipments and which kills trees in some parts of the world. The lifting of the ban resulted from a cooperative effort by agencies in both state governments as well as the United States Department of Agriculture.

Late in May 2012, China, the world’s largest importer of logs and the second largest market for U.S. timber, set up a six-month pilot program for Virginia and South Carolina that will allow log shipments from the two states to resume under certain restrictions. The original ban applied only to logs, and not to lumber or other manufactured wood products, because the pro-cessing of those products kills any pests that may be present.

The export of forest prod-ucts is important to the econo-mies of Virginia and South Carolina, a well as to the U.S. as a whole. In 2011 the value of Virginia’s log exports was esti-mated at $57 million, down $10 million from 2010, thanks to the ban. Prior to the ban, Virginia was a major east coast supplier of logs to China.

South Carolina’s interna-tional forest product exports amount to $1.3 billion each year, although raw logs account for less than $10 million of that total. Still, industry officials in South Carolina expressed concern that the ban by China could put a cloud over South Carolina forest products exports and all of its exports generally. Forest prod-ucts are the number one export by volume from the Port of Charleston and one-third of the total port movements. Forestry represents the top manufacturing segment of the state economy as measured by jobs and wages.

The United States as a whole exported over $7.7 billion in forestry products last year, of which around 25 percent landed in China. Seaports in Virginia and South Carolina handled over $500 million in U.S. for-estry exports last year.

Curtis Struyk, president of Carolina Ocean Lines and a co-founder of the U.S. Lumber Shippers Association, said he thinks his company will be able to export around 25 percent of the number of containers through the Port of Virginia that it did before the ban. Struyk estimated that he had shipped at least 200 contain-ers of logs a week to China using Virginia ports.

“I never thought the ban would have lasted this long,” Struyk said. “I am just glad it is over and am looking forward to

getting back to business as usual.” The pilot program was

initiated on May 24, follow-ing a fact-finding trip to Vir-

ginia by officials from China’s Inspection and Quarantine Bureau. The three inspectors sent by the Chinese govern-

ment spent 10 days in the U.S. at the end of April.

Their tour wrapped up in South Carolina where it included guided trips through

forests, manufacturing plants, paper mills and a visit at the Port of Charleston.

Under the program insti-tuted by by the Chinese govern-ment, export logs from Virginia and South Carolina were allowed to re-enter China beginning on

June 1 provided they under-went enhanced pest treatment and testing protocols under the terms of the pilot program. Logs exported to China during the pilot program must meet all existing export requirements, as well as certain additional requirements regarding fumi-gations, a quarantine enhanced for pinewood nematode testing, phytosanitary certifications, as well as restricted ports of entry. At the end of the pilot program, if all logs exported to China have met quarantine requirements, China has agreed to formally reopen the market for exports of logs from Virginia and South Carolina.

The pilot program restricts (RESUME – continued on

page 7)

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George Lauriat ........................................................................Editor-in-ChiefRobert Kirk .......................................... Managing Editor/ Print ProductionKristen Davis ....................................................... Web Manager/ Ad DesignCarole Lauriat ................................................Office & Circulation ManagerPeter Buxbaum ..................................................... Northeast CorrespondentKaren Thuermer ..............................................Mid-Atlantic CorrespondentStas Margaronis ..................................................West Coast CorrespondentPaul Scott Abbott ...........................................................Gulf CorrespondentLeo Ryan .................................................................... Canada CorrespondentPaul Richardson ........................................................Europe Correspondent

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Forest products show positive volumes; legislation holds snags

By Karen E. Thuermer, AJOT

(SNAGS – continued on page 6)

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Hardwood lumber increased 8 percent, softwood lumber decreased only 3 percent, hard-wood flooring increased 2 per-cent while assembled flooring panels increases 11 percent, softwood flooring decreased 6 percent, hardwood plywood up 8 percent, softwood plywood down 6 percent.

Figures released by the U.S. Bureau of Census Trade Data, analyzed by USDA/FAS indi-cate that U.S. exports of forest products have also been increas-ing over recent years. It states that while recession and its lin-gering affects on the housing market have depressed the U.S. market for many species. the growing middle class in China, India and Middle East is filling that gap.

Specifically, from October 2011 to April 2012, the value of U.S. exports of forest products going to South Asia increased 57.42 percent; to South Amer-ica, 40.83 percent; and to Sub-Saharan Africa, a whopping 147.36 percent.

Meanwhile, the Ameri-can Hardwood Export Coun-cil (AHEC) sees little prospect of significant improvement in exports of American hardwoods to Europe during 2012.

“This gloomy forecast is implied by slow or declining eco-nomic growth, recent strengthen-ing in the dollar-euro exchange rate, continuing weak construc-tion sector activity across much of Europe, and relatively high stocks of domestic hardwood products,” AHEC writes.

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who wanted to pick it.”CN’s partner in the plan is

Caisse de depot et placement du Quebec, which manages the Quebec pension fund and will own a third of the railway.

“We’re a long-term investor and infrastructure are the type of projects where we like to invest,” said spokesman Maxime Cha-gnon. “We always want to have a partnership with businesses that are leaders in their sector.”

Big fears

The revenue numbers are big enough to stoke fear among junior miners, who need a rail-way to get ore to market but cannot operate mines profitably if transport costs run too high.

“Rail is definitely a service that the industry badly needs,” said Sandy Chim, chief execu-tive of Century Iron Mines Corp, which is developing the Attikamagen Lake iron-mine project near Schefferville with partner Champion Minerals Inc.

Chim worries that CN’s plan, which asks miners to make minimum volume commitments and pay rates tied to the final project cost, is too profit focused and could hurt development.

He wants assurances that the railway is there to support the miners, rather than squeeze profits from them, with a long-term set rate system that ensures fair returns.

“To make Canada the third-largest producer, Canada has got

to have some long-term com-petitiveness on a very major cost component - which is the infra-structure,” he said.

Current Canadian output of the metal, which is too heavy to be transported by truck, is around 40 million tonnes a year, while top global producers Aus-tralia and Brazil have a com-bined output of more than 850 million tonnes a year.

Assuming the Labrador Trough projects go ahead, as well as the huge Mary River mine on Baffin Island in the Canadian Arctic, Canada could produce as much as 250 million tonnes a year by 2020, overtak-ing India as the world’s No. 3 producer.

China is also a big pro-ducer, but the government does not release detailed production figures.

Profit focusThe iron-rich Labrador

Trough stretches some 1,500 km along the border between Quebec and Labrador.

Mines were first developed there in the 1950s, but many closed or were sold during the 1980s and 1990s as demand fell. With the recent rise in iron ore prices, driven by rapid urban-ization in China and India, the Trough is booming again.

Companies such as Cen-tury, Alderon Iron Ore Corp, and New Millenium Iron Corp are all developing projects there. Add expansions from current produc-ers like ArcelorMittal and Cliffs

Natural Resources Inc, and all eyes are on the region’s limited infrastructure - especially rail.

The new production will easily surpass capacity on the region’s two existing railways, one of which is privately owned by Arcelor and unlikely to be contracted out to other miners.

The second rail line, owned by Rio Tinto’s Iron Ore Co of Canada, has extra capacity. But it is expected to fill up over the next three to five years as new mines start producing.

“At the end of the day, it is only one line with 80 mil-lion tonnes of capacity,” said Tayfun Eldem, chief executive of Alderon. “Once you get to 80 million tons, that’s it.”

Alderon is in talks with Rio’s common carrier line to ship material from its Kami project to port, but some other junior miners have held prelimi-nary talks on building their own railway. Without a third railway, many of the new mines will simply not be built.

Century’s Chim floated a plan earlier this year for a shared rail line with Adriana Resources Inc and Champion. China’s deep-pocketed Wuhan Iron and Steel Co Ltd is a strategic inves-tor in both Century and Adriana.

Chim has stepped back from that plan since then, saying he hopes talks can bring Cana-dian National, the miners and government together. The rail-way said it has been talking with customers and feels its project is robust. (Reuters)

(STIRS – continued from page 1)

Aditya Birla to buy Canadian paper pulp maker

Indian conglomerate Aditya Birla Group has agreed to buy Canada’s Terrace Bay Pulp Mill for about $110 million to feed its fibre plants globally.

Aditya Birla will buy the mill through a holding com-pany, AV Terrace Bay Inc. Two of the group’s textile companies, Grasim Industries Ltd and Thai Rayon Pcl, will own stakes of 40 percent and 60 percent in AV Terrace Bay.

Grasim will invest $44 mil-lion of the total equity contribu-tion over the next three years, the group said in a statement.

The group plans to invest more than $250 million to con-

vert the paper grade pulp mill to produce dissolving grade pulp with a capacity of 280,000 tons per annum.

Situated in the north shore of Lake Superior, Ontario, the mill, which came under protec-tion from creditors in January, will re-open in October and will make paper grade pulp until fiscal year 2016, when the con-version will be complete.

Aditya Birla Group, whose companies include aluminium producer Hindalco Industries, cement producer UltraTech Cement and mobile operator Idea Cellular , expects to close the deal by July 31. (Reuters)

Buckeye restarts productionSpecialty fiber maker Buckeye Technologies, Inc. restarted its

Florida plant after equipment failure on June 17 caused structural damage to machinery and the plant building.

The specialty pulp line returned to production on June 23 and the fluff pulp line began operations on July 4, the company said in a statement. (Reuters)

Fibria sells land, assetsBrazilian wood pulp producer Fibria moved toward concluding

the sale of land and forest assets in the northeastern state of Bahia to Caravelas Florestal with a 200 million reais ($99 million) payment, according to a securities filing.

Another 35 million reais are due in November. Fibria announced the deal in March as part of a plan to sell assets and new shares to help pay down debt. (Reuters)

6 American Journal of Transportation ajot.com

ALSD_11311_ClckWrk_Lmbr_AJOT_5x7.indd 1 12/17/10 3:02 PM

(SNAGS – continued from page 4)

(SNAGS – continued on page 7)

ness of American hardwoods relative to other wood and non-wood products, for example through innovation to expand use in external environments and con-struction applications, and through con-certed efforts to ensure recognition of the cradle-to-grave environmental benefits of American hardwood.”

A closer look at economic data reflects the economic challenges facing certain mar-kets in the world. For example, the value of U.S. forest products exports to China, South Korea, Italy, Russia, the Philippines, and Peru decreased between October 2011 and April 2012 by a respective 10.06; 21.58; 42.75; 38.86; 44.58; and 45.80 percentage points. By comparison, the value of exports to Vietnam, Belgium/Luxembourg, the United Arab Emirates, and India increased a respective 38.77, 99.40, 48.26, 50.11, and 81.86 percentage points.

Figures show that in 2010, worldwide U.S. forest products exports totaled approx-imately $6.555 billion in 2010; $7.688 bil-lion in 2011. For the period October 2010 to April 2011, the amount totaled $4.316 billion; $4.371 billion for October 2011 to April 2012, up 1.29 percent.

Canada remains the leading coun-try to U.S. exports of forest products. In 2010, about $2.119 billion was exported to Canada; $2.217 billion in 2011. For the period October 2010 to April 2011, that amount totaled $1.266 billion; over $1.328 billion for the same period one year later, up 4.92 percent.

China ranks second for U.S. forest products exports with 2011 figures total-ing around $1.868 billion compared to $1.004 billion in 2010. For October 2010 to April 2011, that amount totaled $977 million; $879 million for the same period one year later, down 10.05 percent.

After China comes Mexico then South Korea as the top third and fourth export markets for U.S. forest products.

lacey act coMPlications

Organizations promoting the inter-national trade of forest products point

out that in this global economy there are fewer and fewer straight lines to trade. The supply chain has become very compli-cated. For example, U.S. furniture makers may import exotic wood, then export it for further finishing, then re-import it as a finished product. Consequently, business leaders must be nimble and flexible with the supply chain following the customer.

Ashley Amidon, manager of gov-ernment and public affairs at Alexandria, VA-based International Wood Products Association (IWPA), observes that while the industry was hit hard by the downturn in the housing industry that began in 2008, today it’s experiencing a healthier outlook.

“While we primarily represent import-ers, some of our members have certainly started to look at exporting,” she says.

A number of issues impact these U.S. importers and exporters. One is the Lacey Act, which deals with the importation of wood and wood products, and plant mate-rials.

“The law was originally passed in the early 1900s to deal with bird feath-ers,” Amidon remarks. “It was amended in 2008 when plants and plant products were added 2008.”

She explains that the point of amend-ing the Act is to prohibit the importation of illegally logged products.

While IWPA members support the principals of the Lacey Act, Amidon explains that when going through its cur-sory drafting, the Act didn’t get the atten-tion it should have in Congress because it was attached to the Farm Bill. As a result, IWPA members have faced huge conse-quences, particularly those who are small businesses, says Amidon.

One big problem is the Act places no limits on the scope of what is illegal. For example, some countries may have obscure laws, including labor laws, of which U.S. importers may not be aware. Some laws may be specific to only a small town or region and not available in English. However, under the Lacey Act, breaking any law makes the importation

US Imports of Forest Products2007 2008 2009 2010 2011 Jan-Mar

2012Jan-Mar

2012

Forest Products 18,717,304 14,157,850 9,820,415 11,406,347 10,779,846 2,528,216 2,647,520

Softwood Lumber 5,831,497 3,847,634 2,344,111 3,025,441 2,974,800 746,728 724,702

Other Wood Products 2,705,271 2,493,320 2,006,226 2,154,720 1,710,056 385,726 397,376

Builders Carpentry 2,317,627 1,801,509 1,180,418 1,260,111 1,223,516 273,887 315,245

Hardwood Plywood 1,752,558 1,373,157 959,030 1,211,269 1,163,325 281,475 303,776

Medium Fiberboard 447,790 450,431 475,781 527,647 552,517 121,591 132,611

Waferboard 1,025,961 578,441 417,543 595,547 514,670 127,368 144,809

Softwood Molding 628,883 473,812 364,518 464,217 455,653 106,169 115,678

Hardwood Lumber 647,289 534,550 272,136 344,878 373,480 88,674 95,665

Other Panel Products 349,379 290,674 205,728 219,584 231,351 53,086 60,396

Hardwood Molding 379,191 267,969 177,270 191,044 202,097 50,447 50,057

Cooperage Products 215,599 230,833 164,279 148,240 178,634 8,208 7,994

Softwood Plywood 304,491 235,449 167,221 148,862 171,237 42,134 39,706

Hardwood Veneers 345,155 287,036 176,582 180,745 169,593 42,877 42,470

Particleboard 205,714 181,673 144,922 166,589 159,888 34,639 42,695

Packing Material 154,789 140,436 103,387 126,304 122,953 32,354 30,424

Flooring Panels 65,247 132,779 107,794 109,258 108,429 24,051 26,806

Hardboard 577,689 341,762 240,355 177,829 102,771 29,793 19,475

Softwood Veneers 130,650 90,114 60,874 82,317 96,131 24,194 27,566

Poles 67,181 71,912 52,502 59,463 65,543 12,480 19,201

Prefabricated Buildings 98,650 64,241 56,296 50,291 55,607 7,598 11,072

Softwood Siding 54,987 67,008 34,658 36,165 36,226 6,457 9,532

Softwood Logs 165,505 74,110 33,323 33,910 33,284 9,475 11,842

Hardwood Flooring 136,651 46,898 23,684 17,341 24,841 5,466 5,574

Hardwood Logs 23,995 20,364 14,436 21,520 21,763 4,976 6,657

Treated Lumber 13,921 10,694 14,088 17,023 13,445 4,646 1,759

Railroad Ties 9,931 8,484 5,957 3,655 4,265 1,099 727

Pulpwood 8,949 8,263 4,415 4,129 4,033 856 1,906

Hardwood Chips 9,586 3,554 1,504 21,813 3,251 339 388

Pencil Slats 10,001 9,508 4,101 2,116 2,186 329 666

Hardwood Siding 3,031 1,312 866 1,324 1,559 433 189

Softwood Chips 1,681 1,834 2,452 506 1,466 161 87

Softwood Flooring 28,456 18,092 3,958 2,489 1,279 500 469

Total 18,717,304 14,157,850 9,820,415 11,406,347 10,779,846 2,528,216 2,647,520

7 American Journal of Transportation ajot.com

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the Virginia and South Carolina log exports to two designated ports: Shanghai and Jiangsu. “There were a lot of ports in China left off,” said Struyk, “but luckily Shanghai’s one of the ports.”

Of the extra inspection and fumiga-tion processes, Struyk said, “It will be a little more cumbersome, but, it is a step in the right direction.”

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) was one of the hosts of the Chinese delegation and was instrumental in getting the ban listed.

“This pilot program signals renewed confidence in Virginia and South Carolina forestry exports from a key trading part-ner,” said Rebecca Blue, deputy under secretary for marketing and regulatory programs at the Department of Agricul-ture. “We are optimistic that the enhanced sampling and treatment procedures will lead to a successful pilot program. We are committed to working with our stake-holders in Virginia and South Carolina to make this a reality.”

When pest detections led China to suspend exports of logs from Virginia and South Carolina last spring, USDA began work to minimize the impact of this trade disruption. “We began by nego-tiating with China to establish science-based standards to allow log exports to resume,” said Blue. “Our work culmi-nated in a visit by Chinese officials to South Carolina and Virginia. The delega-tion’s visit took them to facilities where state and federal officials carry out agri-cultural inspections and treatments, tours of port facilities, and demonstrations of land management practices at forests, nurseries, and logging operations across Virginia and South Carolina.”

In late April, Blue met with the Chi-nese delegation while they visited the Portsmouth Marine Terminal in Ports-mouth, Virginia. “We met with represen-tatives from the Virginia Port Authority, Virginia Department of Agriculture and Consumer Services, and the Virginia for-estry and logging industries,” said Blue. “Together, we saw countless examples of how our sampling, treating and safeguard-ing procedures work, ensuring high-qual-ity, pest-free log exports. After the visit, Chinese officials commended USDA, the Departments of Agriculture in Virginia and South Carolina, wood trade industries, port authorities, and fumigation companies for the work they have done to improve safeguarding measures against pinewood nematodes and other pests.”

Blue is confident that log exporters and other involved parties will be able to determine ways to meet these addi-tional requirements of the pilot program. “We know the importance of regaining the Chinese market for our Virginia and South Carolina forestry industries,” she said. “We are committed to assisting our industry partners to meet the conditions of the pilot program and continuing to fight for unrestricted exports of logs from these two states.”

Jerry Bridges, executive director of the Virginia Port Authority, said the port was preparing for a resumption of the export log business. “Normally the harvesting of logs slows in the summer because of the heat,” he said, “but we’re having some customers tell us they are going to work through the summer to help make up for lost time. This is really good news for us and all of those people and businesses that are associated with this industry. This is a good first step in get-ting back to normal.”

(RESUME – continued from page 3)

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(SNAGS – continued from page 6)of those forest products illegal.

It’s extremely problematic, she points out, for a small business already suffer-ing from the economic recession to know every law from every country in the world.

A second problem is the Lacey Act does not grandfather in old materials, meaning that companies that imported wood before 2008 may not know its coun-try of origin.

“This is particularly a problem for someone who is small artisan making guitars or furniture and whose stockpile may go back 10 years,” Amidon explains. “There’s no way to trace from where that wood came.”

Another issue with the Lacey Act is interpretation. Currently, the Department of Justice maintains that the govern-ment may conduct a raid on a company it claims has an illegal shipment.

“You would think the company would have right to petition to get the goods back,” she says. “But the DOJ says the company has no right to petition and cannot appeal – even if company executives say they went over and inspected the saw mill, and per-formed due diligence regarding paperwork and price. The DOJ views illegal wood as the same as cocaine.”

The last problem is shippers are required to file a declaration when importing any plant or plant product. In other words, shippers must fill out forms regarding from where each item is har-vested and shipped. This can be chal-lenging since forest products are often processed in a host of different countries.

“It’s not a difficult issue when deal-ing with the law, but when you break that down to composite materials – you are dealing with tens of thousands of pieces of data entry,” Amidon says. “They have to list everything it could possibly be. And

if you are bringing in sawdust, it is very difficult to know everything that could be in that sawdust.”

other iMPort issues

In addition, importers must pay $30 for each declaration filed. Some companies must file thousands of declarations a week.

“It is frustrating to pay out all of this money at a time when business is already shaky,” she says.

Add to this the fact that while the ship-ment goes through U.S. Customs, the paper-work is sent to the Animal and Plant Health Inspection Service (USDA-APHIS).

“From there, the shipment is pro-cessed,” she explains. “But if the paper-work does not get processed for a week or two, the shipment may have already been sold to, say, a furniture manufacturer. If APHIS tags the shipment as illegal -- for whatever reason, and a declaration throws up a flag, that means the goods can be seized but not necessarily from the com-pany that imported it.”

A case example is Gibson Guitars, which has been raided twice on Lacey Act violations. Here the woods used in constructing Gibson’s fretboards, derived from India and Madagascar, were the subjects of federal scrutiny. Namely, they wanted to find out if the rosewood wood used came from protected forests.

Both raids cost the company around $2 million in materials. Worse, the charges from the first raid in November 2009 have not yet been filed.

“And the judge says they have no standing,” she adds.

Musicians traveling abroad with old guitars are also warned to be careful since they can be asked to account for every wooden part of their guitars when re-entering the United States. The law includes the trade in vintage instruments..

8 American Journal of Transportation ajot.com

JULY 16 - JULY 29, 2012 NORTH AMERICA’S TRANSPORTATION & LOGISTICS NEWSPAPER 9

Airlines have urged West-ern governments to do more to improve safety in Africa, and accused the European Union of failing to grasp the continent’s needs by banning dozens of carriers.

The head of the Interna-tional Air Transport Associa-tion (IATA), which represents most major airlines, said a list of operators banned from the EU included several that are safe, that and the EU failed to aid others needing practical help.

Plane crashes in Nigeria and Ghana have killed over 160 people in the past week, increasing con-cerns over Africa’s safety record.

“The airlines on the EU blacklist are on it because the EU hasn’t adequate confidence in the safety oversight provided by regulatory authorities, so the airline can be perfectly safe but the EU decides the regulator isn’t doing its job,” said IATA’s Tony Tyler, director general of the Geneva-based airline lobby.

IATA says its members must pass a tough check-up called the IATA Operational Safety Audit (IOSA). Airlines in the scheme, which also contains many non-IATA members, had a 53 percent better safety record last year than ones outside it, Tyler said.

“This is why we think the EU banned list is a misguided approach. It is not helping any-body and it is not improving safety.”

The latest EU blacklist includes 279 carriers from 21 states, 14 of which countries are African.

The list includes a handful of IATA members including Sudan Airways and part of the fleet operated by Air Madagascar.

IATA says African aviation safety improved from 2010 to

2011, but the continent’s accident rate is still the worst in the world.

DouBle stanDarD

A Boeing McDonnell Doug-las MD-83, operated by privately owned Dana Air, hit an apart-ment block as it was coming in to land in Lagos recently, killing 153 people in Nigeria’s worst air disaster for decades.

The crash came soon after a Boeing 727 cargo jet oper-ated by Nigerian carrier Allied Air overshot the runway at an airport in the Ghanaian capital Accra and veered onto a street, killing at least 10.

It was the first crash in decades in Ghana, whose air-space has a fairly strong safety record compared with other West African countries.

A spokesman for the Euro-pean Commission defended the system of banning airlines in coun-tries with poor a safety regime.

“The safety performance of an airline depends on several factors, not only on the airwor-thiness of aircraft: for instance pilot and crew training and fit-ness and airline safety proce-dures,” he said.

IATA’s Tyler said the EU let European airlines serve coun-tries whose own carriers were banned not necessarily as a result of the failings of non-EU carriers, but because of concerns over regulation of airspace.

“It smacks of double stan-dards and is the wrong approach,” he said.

“The right one is to get in there and help resolve the defi-ciency in regulatory oversight. Let’s go and assist the regulators to remedy that deficiency - put-ting their airlines on a blacklist isn’t the right approach,” he added. (Reuters)

AIR CARGONEWSAIR CARGO

newsTIACA urges more governments to pursue mutual recognition agreements for air cargo security

More countries should follow the lead of the United States, the European Union, Switzerland and Canada in pursuing mutual recognition agree-ments for air cargo security, says The International Air Cargo Association (TIACA).

The Association called the agreements between the European Union, Switzerland and the United States and between the U.S. and Canada to recognize each other’s security regimes as ‘wel-comed and sensible progress’ towards the shared goals of maintaining the highest levels of air cargo security without impeding international air cargo supply chains.

Michael Steen, Chairman of TIACA, said: “We strongly support efforts to enhance security of the air cargo supply chain without unduly dis-rupting vital commercial flows. Mutual recognition of robust security regimes is an important way to further this goal, so we commend the U.S., EU, Swiss and Canadian authorities for their recent announcements in this regard. TIACA will con-tinue to support additional efforts to mutually rec-ognize security regimes and to implement global, harmonized standards.”

TIACA says the progress made by governments to recognize each other’s national air cargo security

regimes will eliminate duplication of security con-trols and the costs and time delays associated with this whilst ensuring strict air cargo safety and secu-rity requirements continue to be met consistently.

Speaking to delegates at TIACA’s Executive Summit in Moscow, Doug Brittin, Director, Air Cargo at the Transportation Security Administra-tion, said the security threat ‘remains high for all of us’. “Our goal, which we know is shared by the industry, is to not lose a plane,” he added.

He outlined the work TSA has been doing on advanced air cargo data alongside bodies such as ICAO, the World Customs’ Organization and the Universal Postal Union.

Outlining the status of the Advanced Air Cargo Screening (ACAS) program, he confirmed the pilot was still ongoing, having started with express carriers a year ago and subsequently expanded to include passenger and cargo carriers as well as freight forwarders. The objective, he said, was to prove data flows and timelines, adding: “Can DHS (U.S. Department of Homeland Security) looking at this data quickly analyze, determine risk and get information on which screening method to use to the proper place at the proper time?

ABC arranges a trip to the dentist for famous Atlantic walrus

When the star attraction at Russia’s Udmurtskiy Zoo needed some urgent dental work, AirBridge-Cargo Airlines (ABC) was the only way to fly.

Sgata-Neseyka, a rare subspecies of Atlan-tic walrus which is included into Red Book, has been hand-reared by animal specialists at the zoo in Udmurtia since losing its mother. The 520 kilos walrus has prospered under the expert care and attention of keepers at the zoo and has also proved to be multi-talented, entertaining crowds by sing-ing, dancing, clapping, playing the tambourine and kissing the hands of fans.

When Sgata-Neseyka needed treatment to extract an ingrowing tusk, keepers at the zoo iden-tified Tierpark Hagenbeck TPG Hamburg as the best place for the walrus’s treatment and rehabilita-

tion and contacted the livestock experts at ABC to arrange the safe carriage of their precious cargo.

A special transportation cage was manufac-tured for Sgata-Neseyka’s flight to Germany in accordance with IATA’s live animal’s regulations. For the comfort of the walrus, the cargo cabin tem-perature was maintained at +5-10°C for the entire duration of the flight.

Throughout the journey, the walrus was moni-tored by keeper Evgeniy Thashkin and Svetlana Malysheva, director of the zoo.

ABC ensured Sgata-Neseyka arrived in Frank-furt-am-Main safely, on time and in good health. The walrus will spend the next few weeks in Germany to recover from its operation before returning to Udmurtskiy Zoo.

A special transportation cage was manufactured for Sgata-Neseyka’s flight to Germany in accordance with IATA’s live animal’s regulations.

IATA says EU’s airline safety bans hinder Africa

(SECURITY – continued on page 19)

Frankfurt curfew grounds Lufthansa Cape Town flights

A ban on night flights at Frankfurt has caused Lufthansa to withdraw its service to Cape Town this winter, the German national airline said.

Imposed eight months ago, a strict ban on flights after 11 pm leaves no leeway when it comes to weather or medical delays and has resulted in over 10,000 passengers being stranded overnight in Frank-furt since the ban took effect, Luf-thansa manager Kay Kratky said.

The night flight ban is an extra headache for Lufthansa, which is currently cutting costs to battle low-cost competition and rising fuel prices.

“Cape Town will no longer be served from Frankfurt this winter because we can’t leave our passengers stranded,” said Kratky, in charge of flight oper-ations at Lufthansa’s passenger

airlines division.He cited the example of a

plane due to fly to Johannesburg being forced to turn round on the Franfurt tarmac after a problem loading a container.

Instead, the Cape Town flight will be shifted to Munich, which itself has been dealt a blow to expansion plans after a proposed third runway was voted down by residents.

“Munich will start hitting bottlenecks in three, four or five years’ time,” Kratky, a former pilot, said. “But we have those problems in Frankfurt now.”

Lufthansa has previously warned the restrictions at Frank-furt could lead it to shift invest-ment elsewhere to seek growth. “Our ability to compete depends on being able to scale up,” Kratky said. (Reuters)

10 American Journal of Transportation ajot.com

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China and Mongolia inland infrastructure development expanding with trade

By Robert L. Wallack, AJOT

A number of factors are contribut-ing to the People’s Republic of China’s inland infrastructure construction of highways, roads, railways, airports and container depots. Industrial and govern-ment investments are shifting from east-ern coastal provinces to inland regions because of increasing costs of labor and land and more demand for logistics ser-vices are from a growing retail sector to satisfy consumer demand and not just for overseas exports. Infrastructure develop-ment is evident in the cities of Nanjing and Suzhou of the Yangzte River Delta outside of Shanghai as well as in central and western cities, provinces and autono-mous regions such as Chengdu and Inner Mongolia Autonomous Region (IMAR) bordering Mongolia to North Asia.

China’s Western Development Strat-egy toward inland investment for logistics infrastructure is always evolving. Since 1997, the government with World Bank assistance began and constructed by 2005 eight inland container depots (ICD) to improve the flow and storage of goods through the Port of Tianjin near Beijing and reduce economic disparities between coastal and inland areas. Baotou Transpor-tation International Container Terminal, IMAR is one of these ICDs and an impor-tant link with Tianjin Port for shipments for Mongolia’s fast growing economy. “We look forward to further improvements by the Chinese government to investing in more efficient transportation infrastructure and intermodal networks to accommodate for the expansion in the retail market over the next five years (PRC’s 12th Five Year Plan),” said a spokesperson for Orient Overseas Container Line (OOCL) in a recent interview with the American Jour-nal of Transportation.

The World Bank is continuing to assist China’s transport infrastructure

effort to increase their rail network to 120,000 kilometers by 2020 as proposed in China’s Mid-and Long-term Railway Network Plan. The IMAR Huhehaote-Zhangjiakou $4.5 billion railway project along the Beijing corridor is in the works to improve containerized rail freight traffic to and from Mongolia. The Asian Devel-opment Bank (ADB) is also completing the final highway segment in Mongolia on Asian Highway 3 to link Ulaanbaatar capital city to border port Zamyn-Uud, then across to IMAR to increase container and project cargo through Tianjin Port.

Foreign Investors are recognizing the inland shift as proven by foreign direct investment (FDI) flows. China Daily reported recently, that the west accounted for only $12 billion of total 2011 FDI of $116 billion in China, but the west saw a growth rate of 28% or more than four times the rate in the east. Also, since 2007, the government policy selected 44 cities in the country’s central and west-ern regions as destinations for export-processing businesses for moving inland from coastal cities. This industrial shift is evident in the value of the processing trade inland, which increased by 78.4% to reach $82.3 billion in 2011 and from 2006-2011 accounted for 6.3% of the country’s total value of processing trade from 2.5%.

Inland logistics services are receiv-ing more attention from the government in order to make new transport infrastruc-ture operational and up to international standards. In 2010, the National Develop-ment and Reform Commission (NDRC), the national central planning body, pub-lished policies to improve logistics for the inland market and set up a lead team to coordinate. The NDRC and the National Bureau of Statistics will issue data on (EXPANDING – continued on page 12)

China trade surplus jumps as import growth falters

China’s June trade data stoked anxiety about the strength of domestic demand in the world’s second biggest economy as imports rose at only half the pace expected, signalling a need for Bei-jing to do more to bolster growth.

Officials singled out the debt crisis in the European Union - China’s biggest trading partner - as key to Beijing’s abil-ity to meet its 10 percent target for trade growth this year, with softening sales to the EU in the first half of 2012 seeing the United States overtake it as China’s top export destination.

Annual import growth of 6.3 percent in June fell far short of the 12.7 percent fore-cast by economists and the 12.7 percent achieved in May, indicating both a drop-off in domestic demand and the running down of inventories by exporters worried about the weakness of new order growth.

“In today’s ‘accentuate the negative’ world, this is going to put the focus on the domestic demand angle and the hard land-ing story,” Tim Condon, chief economist and head of Asian economic research at ING in Singapore, told Reuters.

Import data eclipsed an upside sur-prise in June export growth to 11.3 per-cent versus the 9.9 percent expected, leaving a trade surplus of $31.7 billion against May’s $18.7 billion.

Brent crude oil sank 1.7 percent after the data, falling below $99 a barrel, while Asian shares gave up gains to trade 0.5 per-cent down on the day and U.S. stock futures extended losses, pointing to a weaker open-ing on Wall Street later in the day.

The Australian dollar, sensitive to demand from the biggest single market for Australia’s commodities, also fell.

“Exports are better than expected, but I don’t this means that we shouldn’t be concerned about exports,” Sun Junwei, Beijing-based China economist with HSBC, said.

Customs spokesman, Zheng Yuesh-eng, said as much in a news conference to release the data.

“China’s exports to the European Union actually fell in the first half. Our exports to Germany have been falling for four consecutive months and exports to France have been on decline for three straight months, too. Our exports to Italy have been falling for 10 straight months since September,” Zheng said.

“The United States replaced Europe to become our largest exporting market in the first half. However, U.S. economic recovery is not stable yet, and its demand for our goods has not returned to the level seen before.”

China’s exports to the EU fell 0.8 percent in the first half of 2012 to $163.1 billion, while to the United States they rose 13.6 percent to $165.3 billion. China imported $65.8 billion worth of U.S. goods in the first six months, up 7.9 percent.

traDe tensions

That rise in exports to the United States is likely to inflame critics of Bei-jing’s trade policies among Washington lawmakers who believe China manipu-

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12 American Journal of Transportation ajot.com

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logistics and keep the data updated. In addition, the NDRC will make policies for training, business standards and weed out low competitive logistics firms and improve the strong. “We think that all the above measures are needed, especially the weeding out system to help our logis-tics business be optimum,” according to Cai Yu, founder and managing director of Transluck Logistics, a Shanghai based supply chain service provider.

Road transport is the dominant mode to serve the growing demands on the retail sector by logistics service providers and accounts for 71% of the transporta-tion in China followed by rail of 17%, vessel 11.5% and air .5 percent. Trans-luck serves the retail industry inland to Chengdu, Beijing and Shenyang cities for department stores, hypermarkets, and shopping mall destinations. OOCL uses a combination of truck and barge options to move cargo through strategic inland destinations to meet customer needs and invested in a new world-class warehouse facility in Shanghai earlier this year.

Transluck saw the need for refriger-ated logistics to serve fast moving con-sumer goods (FMCG) to its customers. “We find many FMCGs and supermarkets opened their e-shop on Taobao Internet net-work and on their websites, but lack meat, fruits and seafood because of underdevel-oped refrigerated logistics services. Since 2008, we started refrigerated business and built a refrigerated warehouse with a team of 60 people. We use this facility and a refrigerated truck for a famous interna-tional chemical group with tracking and tracing of shipments for the whole journey which is useful experience to develop fur-ther in FMCG,” said Mr. Cai Yu.

There is still much room for improve-ment for inland infrastructure and logis-tics services, especially for temperature sensitive goods. OOCL commented that the investment costs for cold chain storage and truck transport can be as high as three to five times more than normal warehous-ing and trucking which hinder national and integrated cold chain logistics ser-vices by small to medium size firms. Transluck Logistics cited the government monopoly in rail, air transport and cold chain infrastructure as state owned and therefore, logistics companies “cannot make competitive.” There is also lack of understanding of concepts in China as to supply chain and cold chain management and that “we still have a long way to walk, learn from foreign concept, technology

and standards to combine with the actual in the local market,” said Cai Yu.

Cross-border infrastructure construc-tion to China’s neighboring countries is also in the works. The National Port Management Office released a plan to build 39 new ports or border crossings and expand 56 existing ones through 2015. Of China’s 284 open ports, 146 are in coastal areas, 111 along borders and 27 inland, according to China Daily on May 4th. Mongolia to the north is benefit-ing from more border construction based on vast mineral resource exports such as coal, copper, iron ore and gold.

Mongolia’s inland infrastructure investments and construction are lack-ing and China aims to assist in financing since bilateral trade was $6.3 billion in 2011 or an increase of 84.3% over 2010. Last year, the two countries agreed to a ‘strategic partnership” based on $4.37 billion in exports to China or 91.3% of Mongolia’s total export volume as well as China already accounting for a large por-tion of Mongolia’s $5.3 billion in FDI in an $8.2 billion economy in 2011.

“We need a modern container yard with equipment in Ulaanbaatar for well functioning distribution of inbound and outbound shipments,” said Ekhtuvshin, co-founder of Landbridge International Freight Forwarders in a recent interview with the American Journal of Transporta-tion. The new highway between Ulaan-baatar and Zamyn-Uud border port will help, but the railway is still a single-track line, slow and there are problems with the availability of rail wagons, he continued. Mongolia’s transport and logistics infra-structure is also hindered by the fact that key assets are controlled by a national and Russian joint venture monopoly, which impacts competition and profitability.

These infrastructure deficiencies undermine logistics service provid-ers’ capacity to handle not just natural resource exports, but to support the rap-idly expanding service sectors in retail and transport. In 2011, the World Bank reported 17.3% gross domestic product (GDP) growth and in the first quarter of 2012, a 16.7% GDP increase year over year of which service sectors grew 51% (wholesale and retail trade) and transport 11.7% year over year. Building materi-als, perishables and other consumables are filling more import shipments due to the mining, construction at mining sites and of new apartments and urban popula-tion growth at present and forecasted for decades in Mongolia.

(EXPANDING – continued from page 10)

APM Terminals takes stake in Ningbo port expansion

Shanghai Port container throughput up 5.7% in June

Shanghai Port, the world’s busiest container port, saw its container volume in June rise 5.7 percent from the previous year, with the growth rate picking up for the second straight month, data issued by the port’s operator showed.

Container throughput reached 2.77 million twenty-foot equivalent units (TEUs), down from 2.84 million in May.

The annual growth rate nearly dou-bled from May’s 2.8 percent.

According to economists polled by

Reuters, trade data is expected to show annual export growth of 9.9 percent in June and import growth at 12.7 percent.

Shanghai Port became the world’s first port to exceed the 30 million TEU threshold in 2011 with a total container throughput of 31.7 million, 9.2 percent more from a year earlier.

Zhuge Yujie, president of Shanghai International Port (Group) Co Ltd, the port’s operator, warned in May that growth would slow this year to 2-3 percent. (Reuters)

APM Terminals will take a one-fourth stake in a project to expand Chi-na’s Ningbo Port with total investments of 4.29 billion yuan ($673.4 million), the companies said.

“We believe in China and will con-tinue to invest in its development,” APM Terminals Chief Executive Kim Fejfer said on Danish commercial broadcaster TV2 News.

Ningbo is the sixth-largest container port in the world and the third-biggest in China with throughput of 14.5 million 20-foot equivalent units (TEU) in 2011 and strong growth in recent years, APM Terminals said in a statement.

“This agreement creates important

new port capacity needed for our custom-ers in one of the fastest-growing container markets in the world,” Henrik Pedersen, chief executive of APM Terminals Asia-Pacific region, said in a statement.

The companies will jointly invest and operate berths 3, 4 and 5, comprising a one kilometer quay in Ningbo’s Meishan Container Terminal, APM Terminals said. “Once constructed, the new facility will become operational by Dec. 31, 2014.”

At its current growth rate, Ningbo’s capacity utilisation will exceed 80 per-cent by the end of 2012 and the Meishan project for berths 3 to 5 represents the future source of capacity, APM Termi-nals said.(Reuters)

Asia companies flex more muscle in world trade

Companies in nine East and South-East Asian countries are to play a greater role in global trade in the next decade with a survey showing their spending on foreign expansion could rise 60 percent by 2020.

Audit and advisory firm Ernst & Young surveyed 600 companies in Singapore, Malaysia, Taiwan, South Korea, Thailand, Indonesia, Hong Kong, Vietnam and China and found these companies were become far more active in terms of expansion.

The survey found spending on for-eign investment by these countries was expected to rise to $400 billion by 2020 compared to $240 billion in 2011.

The survey also found that the big-gest companies in these markets were not seeking to invest primarily in Western markets but were looking to neighbouring Asian markets for expansion with China seen as the best opportunity for growth.

“Once viewed by Western multina-tionals primarily as a source of low-cost labor and manufacturing, Asian players are now international players in their own

right,” Ernst & Young said in a statement.Forty-two percent of the 177 biggest

companies surveyed chose China as their best opportunity for growth, followed by India at 33 percent, Indonesia at 29 per-cent and Vietnam at 25 percent.

The report, “Beyond Asia: Strategies to Support the Quest for Growth,” attrib-uted this focus to the larger capabilities of these firms which allowed them to handle large Asian markets.

The survey found 32 percent of 316 regionally focused firms operating within Asia saw Western Europe as their best opportunity for international growth.

It found 28 percent listed the Middle East and North Africa (MENA) as the most attractive places for future invest-ment, “thanks to the attractively priced assets of the former and the cost-effective manufacturing of the latter”.

The report identified several risks, saying that new local markets may have nuances that are hard to understand or control, especially for a local management team without a global outlook. (Reuters)

JULY 16 - JULY 29, 2012 NORTH AMERICA’S TRANSPORTATION & LOGISTICS NEWSPAPER 13

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interMoDal & logistics news

CN to construct five long sidings on B.C. North Line as part of C$155-million expenditure

CN announced that it plans to con-struct five extended sidings on its B.C. North Line in 2012 as part of a multi-year capital program to expand freight train capacity to handle growing freight volumes along its important Edmonton, Alta.-Prince Rupert, B.C., corridor.

In 2011, more than half a million car-loads/intermodal units moved over CN’s B.C. North corridor. By 2015, CN traffic on this line could nearly double.

CN has extended or constructed 21 sidings to handle 12,000-foot trains between Edmonton and Prince Rupert since 2004. This is in addition to new signaling and train control, several tunnel and bridge clearances, yard expansions at Smithers and Terrace, B.C., and the installation of a longer siding at Swan Landing, Alta.

CN’s investments since 2004 in capacity expansion along the Edmonton-Prince Rupert corridor will total more than C$150 million by the end of this year, with further extended sidings expected to be built in future years.

Keith Creel, CN executive vice-pres-ident and chief operating officer, said: “CN’s sizable investments in rail infra-structure in northern B.C. and western Alberta are helping us accommodate grow-ing import-export traffic moving between the Port of Prince Rupert, the B.C. interior and major centres across CN’s network in Canada and the United States. The invest-ments will also help us better move rising export coal volumes from existing and new

mines in the region to Ridley Terminals at Prince Rupert, whose handling capacity is expected to double by the end of 2014 to 24 million tonnes.

“The longer sidings increase the fluidity of operations in this major CN freight corridor and allow us to haul increased volumes in safer, more efficient trains equipped with distributed power (DP) technology.”

DP permits remote control of a locomotive or locomotives throughout a train from the lead control locomo-tive. DP provides faster, smoother train starts, improved braking and lower pull-ing forces at the head-end of a train, and improved safety. With more optimum matching of motive power to train weight, DP locomotives allow CN to reduce fuel consumption and reduce environmental emissions.

Creel said: “Our infrastructure investments are critical parts of our B.C. North Gateway strategy to handle increased volumes of containers, coal and other commodities to and from the Port of Prince Rupert. This strategy aims to help CN tap new opportunities efficiently and productively while helping our customers to expand their businesses and compete more effectively in their end markets.”

CN plans to invest a total of C$1.8 billion in 2012 to maintain and upgrade its overall North American railway net-work, support growth and productivity initiatives, and continue to provide its customers quality service.

Southern Pacific Resource Corp. makes arrangements to transport and market bitumen via CN to Gulf Coast

Southern Pacific Resource Corp. (“Southern Pacific” or the “Company”) announced completion of a long-term arrangement to transport its bitumen to the U.S. Gulf Coast via the rail network of CN. Under this arrangement, Southern Pacific expects to significantly increase its plant gate bitumen netback using rail transportation that reduces diluent costs, and offers access to Brent-based pricing as opposed to selling its bitumen into a pipeline that offers access to West Texas Intermediate (WTI) based pricing.

This agreement is expected to allow Southern Pacific to generate attractive returns from Phase 1 of its STP-McKay Thermal Project, the only new steam assisted gravity drainage (“SAGD”) oil sands project anticipated to start up in 2012. STP-McKay is located about 45 km (28 miles) northwest of Fort McMur-ray, Alta. Phase 1 is designed to recover 12,000 bbl/d of bitumen.

The completed rail marketing solu-tion includes agreements with CN, Rick’s

(BITUMEN – continued on page 16)

UP CEO sees slow, steady economyUnion Pacific Corp’s chief executive

said the steep slump in coal shipments has likely bottomed out and overall peak-season shipping volumes this year should be a little higher than in 2011.

Economic activity in the United States is slow but seems to be holding in a steady pattern, Jack Koraleski, chief exec-utive of Union Pacific, the largest publicly traded U.S. railroad, said in an interview at the New York Stock Exchange.

“Right now, there’s really not any-thing that we could put our finger on to tell you that the economy is getting softer,” he said. “We see a slow, continual growth pattern.”

Declining coal volumes, the result of an unusually mild winter and decade-low natural gas prices, have been a top con-cern for railroads including Union Pacific, Kansas City Southern, Norfolk Southern Corp and CSX Corp and as coal represents a significant portion of their revenue.

Coal represents about one-fifth of Omaha, Nebraska-based Union Pacific’s business.

Union Pacific, which also hauls freight from autos and lumber to crude oil and food products, recorded second-quarter gains in most other segments that offset slumping demand for coal, Koraleski said.

A series of economic indicators - the

latest being the first drop in U.S. manu-facturing in nearly three years - is adding to the evidence of uneven global eco-nomic growth.

About 40 percent of the railroad company’s business begins or ends out-side of the United States, the chief execu-tive said.

“We haven’t seen a lot of impact from the European discussions and disruptions that have been going on,” he said.

Increases in other segments, led by autos and intermodal shipments, have offset the drop in coal at Union Pacific. And now coal volume is beginning to turn upward.

“Coal looks like it has hit the bottom and is starting to come back up,” Koraleski said.

“We’re certainly encouraged by the temperatures outside,” as hot weather and greater air-conditioning usage could lead utilities to burn off coal stockpiles.

Intermodal refers to the shipment of goods in containers that can be moved from one form of transportation to another, such as from ship to train.

Lumber shipments are also building, reinforcing some U.S. housing indicators pointing to a turnaround from a long and deep slump.

Union Pacific’s lumber carloads (ECONOMY – continued on page 19)

Two bodies buried by coal from derailed Illinois train

The bodies of two people trapped in a car under giant mounds of coal, which spilled from a derailed train near Chicago, were recently unearthed and removed from the scene, authorities said.

Wayne Globerger, the fire chief of Glenview, Illinois - the Chicago suburb where the accident occurred - declined to identify either victim.

Globerger told reporters that crews were searching the site north of Chicago for any other vehicles that may have been buried.

31 of 138 cars of a Union Pacific

train derailed on an 86-foot-long bridge, spilling large amounts of coal, railroad spokesman Tom Lange said. The derailed cars piled up on the bridge, putting more weight on the structure than if the train had kept moving, and likely caused the bridge to collapse, Lange said.

The derailment may have been caused by steel rails expanding in extremely hot weather.

Initially, no injuries were reported. But authorities cleaning up the debris dis-covered a car bumper, and then the vehi-cle with the two victims inside. (Reuters)

JULY 16 - JULY 29, 2012 NORTH AMERICA’S TRANSPORTATION & LOGISTICS NEWSPAPER 14

Zim adds new Halifax call to Atlantic service

Zim is adding a new call at Halifax from July on the Zim Container Service Atlantic, known as the ZCA service.

The first Halifax call is scheduled for July 19th by the 4,250 teu Zim Texas, which starts the new westbound port rota-tion from Haifa on July 3rd.

Transit times from Tarragona to Halifax with 7 days, 8 days from Genoa, and 14 days from Haifa.

The service is operated with 6 x 4,250 teu vessels and the service will use the Halterm Terminal in Halifax.

Port rotation of the ZCA will then be : Haifa, Piraeus, Genoa, Tarragona, Hali-fax, New York, Savannah, Kingston, Tar-ragona and back to Haifa.

Zim also calls at the Halterm Termi-nal on the ZCP service covering the Asia/USWC/USEC/Canada trade.

Hamburg Süd moves to Los AngelesHamburg Süd will move its terminal

operation from Long Beach to Los Ange-les beginning in late July.

The last ships handled in Long Beach at ITS will be:• Pacific South West /Australia-New Zea-land Service: “JPO Scorpius“ voyage 291 eta Long Beach July 27, 2012• Pacific North West/Australia-New Zea-land Service: “Cap Egmont“ voyage 859 eta Long Beach August 1, 2012• Pacific Coast / North Europe Service and Pacific Coast / South America Ser-vice: “ Cap Palliser” voyage 235 eta Long Beach August 25, 2012 • Pacific Coast / South Seas Service: “Polynesia” voyage 432 eta Long Beach August 11, 2012

In Los Angeles Hamburg Süd ships will be handled at TraPac, Inc. located at: 920 West Harry Bridges Way Berth 136-141

Wilmington, CA 90744Main Number: 310-830-2000Voice Response Unit: 310-518-7008 or 800-688-4665Customer Service: 877-3TRAPAC or 512-794-1400Website: http://www.trapac.com/

First ships calling Los Angeles will be:• Pacific South West /Australia-New Zea-land Service: “CMA CGM Rose“ voyage 292 eta Los Angeles August 3, 2012• Pacific North West/Australia-New Zea-land Service: “Cap Vilano“ voyage 860 eta Los Angeles August 15, 2012• Pacific Coast / North Europe Service and Pacific Coast / South America Service: “Cap Palmerston” voyage 236 eta Los Angeles September 1, 2012 • Pacific Coast / South Seas Service: “Cap Tapaga” voyage 046 eta Los Ange-les August 26, 2012

CMA CGM commits to maintain its BRAZEX service on the South America East Coast – Caribbean trade

The CMA CGM Group announces that its present cooperation with Maersk Line on the “Brazil Express service” (Brazex) on the South America East Coast - Caribbean trade will terminate not later than end October 2012.

However, CMA CGM will maintain its service thereafter, and remains committed to provide a direct and efficient service to its customers on this Trade built up more than 10 years ago.

Service and schedule adjustments taking place as from November 2012 will be com-municated in due course accordingly.

Maersk wins US cargo deal worth up to $2.1 blllion

Maersk Line has won a contract worth up to $2.1 billion for shipping U.S. military cargo, signaling defense officials have put a dispute about overcharging behind them.

The U.S. Defense Department said it had chosen Maersk Line for the contract out of 22 proposals received.

The Maersk group has for decades been a supplier of shipping to the U.S. mili-tary, but the relationship was chipped when Maersk Line was accused of overbilling.

Maersk Line in January agreed to pay $31.9 million to settle claims it overcharged the U.S. military for carry-ing cargo to support American troops in Afghanistan and Iraq.

“It is positive that the U.S. military has put this dispute behind them and not only places the order, but awards Maersk Line the biggest of the orders,” Alm. Brand analyst Jesper Christensen said.

Nonetheless, Christensen said he would not change his estimates for Maersk Line’s 2012 or 2013 results as a result of the order.

Analysts at ABG Sundal Collier also

said the order would not affect their esti-mates.

American President Lines Ltd, part of Neptune Orient Lines Group, won the next-biggest such deal from the U.S. Transportation Command, valued at up to $1.7 billion, the Pentagon’s daily contract digest said.

Farrell Lines Inc was awarded a similar potential $565 million deal, as was American Roll-on Roll-Off Carrier, a unit of closely held American Shipping & Logistics Group Inc, worth up to $553 million, the announcement said.

Smaller military cargo transport con-tracts were announced by the Pentagon for eight other U.S. flag shippers. All of the deals are expected to be wrapped up by the end of August next year, the Defense Department said.

The so-called universal service con-tracts, the seventh series of its kind, cover surface transport, chiefly by sea, though some may include onward ground ship-ping, said Cynthia Bauer, a spokeswoman for the Transportation Command at Scott Air Force Base, Illinois. (Reuters)

Hapag Lloyd owner sees rival as ideal partner

Hamburg Sud would be an “ideal” merger partner to help vault rival Hapag-Lloyd into the top tier of shipping com-panies, a big shareholder in Hapag-Lloyd told Wirtschaftswoche magazine.

“Only a merger can hoist Hapag Lloyd back into the lead group along-side Maersk and MSC,” Klaus-Michael Kuehne told the magazine.

Kuehne is a leader of the Albert-Bal-lin consortium of investors, which holds nearly 78 percent of Hapag-Lloyd.

Hapag’s other main shareholder is TUI AG, with a stake of just over 22 percent.

Hamburg Sud is Germany’s largest privately owned shipping company and part of the family owned conglomerate Oetker group.

Kuehne, who is also majority owner of Swiss logistics group Kuehne & Nagel, said he aimed to remain a long-term shareholder in Hapag after the shipper’s

initial public offering, planned for 2013.If Hapag were to require a capital

increase that would lead to a dilution of his stakeholding, Kuehne would increase his investment in the company to ensure he maintained a blocking minority stake of 25 percent, he said.

Kuehne said he had already reached an understanding to that effect with politi-cians in the city state of Hamburg, which is also part of the Albert-Ballin consortium.

“It is important to me to secure the long-term independence of the shipping company in Hamburg,” Kuehne is quoted by the magazine.

TUI tried to float a stake in Hapag-Lloyd last year but the effort failed due to market turbulence in the wake of the Fukushima nuclear disaster.

In April, a source close to Hapag’s owners told Reuters that Hapag was in no hurry to float. (Reuters)

JULY 16 - JULY 29, 2012 MARITIME Section 15

7th Annual Breakbulk Europe attracts record attendanceThe 7th Annual Breakbulk Europe, held in Antwerp, Belgium at the Antwerp Convention Centre, May 22-24, attracted a record crowd of over 4,800 attendees and 200 exhibitors.

The conference & exhibition drew representatives from nearly two hundred countries, with strong attendance from the Middle East, Africa, the Americas and Asia to supplement the European contingent.

(L-R) Gerald Hess, Norbert Tiemann, Wolfgang Splinner (all Abacor Shipping)

(L to R) Pat Roche, Dave Steinbach (both from Expeditors)

(L to R) Ed Long, Viviane Roels,Van De Wiel (all from Maersk Line)

(L to R) Nicolas Cucidis – Cargo Live, Torge Runge – Rock-It Cargo USA

(L to R)Lars Juhl, Christian Monsted (both from Scan Trans Shipping)

(L to R) Gene Carty – Ceres, Bill Parker – Ceres,  Cary Hagen – VIT,  Bill Franks – CrossGlobe, Roger Giesinger – HRSA,  Art Moye – HRSA, 

George Brown – CP&O,  Jim Wade – VIT

(L to R) Eddy Gorris – Fednav, Candice Clark – Fednav Direct, Koen Ruts – Fednav

(L to R) Rayburn Doucett – Port of Belledune, Linda Ristani – Transport Canada, Wim Van Erck – European Representative Port of Halifax

(L to R) Abbas Shoubaky – Seven Seas Shipping, Wolfgang Karau – Director WWPC, Emad Shahrouri – Seven Seas Shipping, Stuart Murdoch – Director WWPC

Gary Dale Cearly – Global Project Logistics Network

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Trucking, Altex Energy Ltd., Genesis Energy, L.P. , CIT Group Inc. and Tauber Co. Under this arrangement, Southern Pacific’s bitumen volumes will be trucked approximately 60 km (38 miles) from the STP-McKay plant gate to Lynton, Alta., a CN rail terminal located immediately south of Fort McMurray. From Lynton, vol-umes will be transferred into rail cars and shipped approximately 4,500 km (2,800 miles) over CN’s network and a short-line rail part-ner to a terminal in Natchez, Miss. The bitumen will then be trans-ferred to barges that will deliver the product as feedstock to refiner-ies on the Gulf Coast.

CN expects to commence shipment of Southern Pacific’s bitumen from Fort McMurray to Natchez, located on the Mis-sissippi River 135 km (85 miles) north of Baton Rouge, La., start-ing in the fourth quarter of 2012, with volumes ramping up to more than 12,000 carloads per year as production increases.

Rick’s Trucking will trans-port the bitumen from the STP-McKay plant gate to the CN Lynton terminal. Altex will operate the Lynton terminal and will install new loading facili-ties with dedicated capacity for the exclusive use of Southern Pacific. Altex will also manage the day-to-day rail car logistics. Genesis, owner of the terminal in Natchez, will upgrade the terminal to provide Southern Pacific with dedicated capac-ity. Genesis can also provide barge service from Natchez to the various refineries in the Gulf Coast. Tauber will provide the marketing services for the prod-uct into the Gulf Coast refineries and assist with the transition as Southern Pacific assumes this role directly. Southern Pacific has leased approximately 500 rail cars from CIT, which should accommodate most of the STP-McKay Phase 1 volumes.

There are a number of sig-nificant benefits to this rail-based solution for Southern Pacific. Diluent cost savings are a key driver for this arrangement. Dilu-ent savings are achieved on two fronts. The amount of process diluent required at the plant site will be significantly lower than what is required to meet pipeline specifications. By transport-ing bitumen via CN, Southern

Pacific will only require process diluent to blend with its bitumen, thus lowering the total diluent requirements by approximately 33 per cent. Secondly, South-ern Pacific has the opportunity to backhaul lower priced diluent from the Gulf Coast utilizing its empty return rail cars.

Another important driver for securing this marketing arrange-ment is the security of access to the world’s largest market for heavy crude. Given recent regulatory delays around additional pipeline capacity to accommodate growing bitumen volumes from Alberta, the Company has now secured direct and immediate access into the Gulf Coast market. Because of these access issues, the Gulf Coast market for heavy crude cur-rently trades at a premium to WTI, whereas Alberta-based blended bitumen and diluent (“dilbit”) products arriving by pipeline into the Cushing, Okla., region of the U.S. are experiencing significant pricing discounts due to capacity constraints.

The rail and terminal arrangements described above have an average term of five years, with options for extension and expansion related to South-ern Pacific’s STP-McKay Phase 1 Expansion and Phase 2 plans. Expansion opportunities being discussed include the construc-tion of a pipeline system to the CN Lynton terminal or building a rail spur to the STP-McKay plant site. Either option would remove the trucking component and further reduce diluent costs. While the Gulf Coast is the initial target market, the details within the arrangement provide South-ern Pacific with the flexibility to deliver its bitumen to other North American markets or to export terminals along the west coast.

“This arrangement is signifi-cant to Southern Pacific because it demonstrates that alternatives to conventional pipelines are avail-able to market bitumen from the Athabasca oil sands,” said South-ern Pacific’s CEO, Byron Lutes.

James Cairns, CN vice-pres-ident, Petroleum and Chemicals, said the agreement with South-ern Pacific represents an impor-tant milestone in CN’s growing business of shipping crude oil by rail. In 2012, CN expects to move a total of approximately 25,000 carloads of crude oil, up significantly from approxi-mately 5,000 last year.

(BITUMEN – continued from page 13)

JAXPORT now offers direct Central American container service via MSC

The Jacksonville Port Authority (JAXPORT) has announced that the Mediterranean Shipping Company (MSC) has begun a new direct weekly service between Jacksonville’s Talleyrand Marine Terminal and the Central American ports of Santo Tomas de Castilla, Guatemala and Puerto Cortez, Honduras. The revised route allows JAXPORT to offer improved transit times for customers looking to reach these important markets more efficiently.

Guatemala and Honduras are part of the Domin-ican Republic-Central America Free Trade Agree-ment (CAFTA-DR) with the United States. Among the principal commodities these nations trade with the U.S. are agricultural products such as bananas, vegetables, coffee and shrimp, and textiles, garments and minerals. Guatemala and Honduras are also sig-nificant export markets for U.S. products such as

agricultural machinery, chemicals, building materi-als and general consumer merchandise.

“MSC’s move emphasizes JAXPORT’s growing role in the efficient movement of goods between the U.S. and Central America,” said JAXPORT CEO Paul Anderson. “The change underscores the shift that’s taking place as shippers and cargo owners recognize the efficiencies that JAXPORT offers and respond to the opportunities they find here.”

The new service will also allow JAXPORT customers to reach global markets via MSC’s transshipment hub in Freeport, Bahamas.

The vision of the Jacksonville Port Author-ity is to be a major economic engine for Northeast Florida by continuing to be a premier diversified port in the Southeastern United States with con-nections to major trade lanes throughout the world.

SC Legislature commits $300 million to Charleston Harbor deepening

In a strong show of support for the deepening of Charleston Harbor, the South Carolina Legislature now has committed $300 million to fund the con-struction of a post-45-foot harbor project for the Port of Charleston. This allocation would cover the entire estimated cost to deepen the harbor to 50 feet, once the project receives authorization from Congress.

A conference committee comprised of leaders from both legislative houses announced the amended state budget, which increased the cash contribution in the Harbor Deepening Reserve Fund to $300 mil-lion from $180 million previously approved by both the House of Representatives and Senate.

“We are tremendously grateful for the for-ward-thinking leadership in our legislature for recognizing how vital this project is to the entire state,” said Bill Stern, chairman of the South Caro-lina Ports Authority (SCPA). “The Members of the House Ways & Means and Senate Finance Com-mittees, joined by the Members of the Review and Oversight Commission on the South Carolina Ports Authority, have guided this appropriation across the finish line. This deep commitment is proof positive that South Carolina is serious about competing in a truly global business in order to boost jobs and opportunity for its citizens.”

Following the completion of the Post 45 Proj-ect’s feasibility study and authorization by Congress, the Harbor Deepening Reserve Fund would be used to pay for the actual construction of the deepening project, which is estimated at $300 million.

The cost-sharing structure for a Post 45 depth is 60 percent funded by the state, or $180 million. The additional $120 million in the fund would cover the federal share of the project’s construction if federal

funding is not available. The funds also could be used to keep the project moving forward, thereby losing no time due to funding constraints. Expen-ditures from the fund would require approval by the Joint Bond Review Committee comprised of both House and Senate Members.

“This level of commitment instills a great deal of confidence in our customers and shows that the Port of Charleston is ready and able to meet their long-term growth needs,” said Jim Newsome, president and CEO of the SCPA. “We have a good partner in the Corps of Engineers, and we will continue our productive collaboration to deliver a true post-Panamax harbor in the South Atlantic as quickly as possible.”

“I believe the entire legislature views the Port of Charleston’s deepening project as our state’s number one economic priority,” said Sen. Hugh Leatherman, who chairs the Senate Finance Com-mittee. “Last budget year, we committed that our state would find the money for this project. South Carolina has now fulfilled our end of the bargain, and we look forward to the Corps of Engineers delivering a timely study so that the work can get underway as expeditiously as possible.”

“We recognize that our state’s future is tied very much to the vitality and growth of our port,” said Rep. Brian White, chairman of the House of Representatives Ways and Means Committee. “A large number of the companies that located in the Upstate and call South Carolina home chose our state because of our world-class port. By invest-ing in the Port of Charleston, we are charting the course for a bright future.”

(COMMITS – continued on page 18)

JULY 16 - JULY 29, 2012 MARITIME Section 17

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Long Beach Board approves incentives to attract more cargo Larger ships and rail-bound containers will get financial breaks

The Long Beach Board of Harbor Commissioners approved two incentive programs on July 2, one designed to encourage larger, cleaner ships to dock at the Port, and the other aimed at attracting more containers to come via rail through Long Beach.

“We are committed to pro-tecting our market share and the tens of thousands of jobs that depend on our Port,” said Port of Long Beach Executive Director J. Christopher Lytle. “Shippers have options on how to route their cargo, and we want to make sure we give them the right reasons to move through Long Beach.”

Under the programs, which launch on August 1, the larg-est ships calling at the Port will have their daily dockage fees capped, and ocean carriers who

move additional containers via rail through Long Beach will get incentives. The programs will help protect the Port’s share of business in an increasingly com-petitive maritime market, keep jobs in the region and encourage more environmentally friendly and efficient practices.

The Port of Long Beach is one of the few in North America with berths and channels capable of receiving the largest container ships in the world. Earlier this year, the Port began welcoming container ships with capacities of 13,000 twenty-foot-equiv-alent container units or larger. That’s 50 percent bigger than the largest container ships that had called at the Port in the past.

“We are not only big-ship ready; they are calling at our Port now,” Harbor Commis-

sioner Rich Dines said before the board unanimously approved both measures. “This is about going after additional business.”

Larger ships are more cost-effective for ocean carriers to operate and have a smaller impact on the environment on a per-container basis because they can carry more cargo and tend to have newer, less-polluting engines.

Under the program adopted Monday, the Port will cap daily dockage fees at $8,641 a day for ships longer than 345 meters (or 1,132 feet). Ships are charged dockage fees based on their lengths, and without the change, the largest vessels would pay more than $11,000 a day in dockage fees. Ships that qual-ify under the Port’s Green Ship Award Program, another new incentive that also won final approval Monday, may earn up to $6,000 more in incentives. That program aims to attract the newest, least polluting vessels to Long Beach.

Ocean carriers also will save on rail cargo costs under a pro-gram that will give them a $10 incentive for every additional container they move via rail through Long Beach between August 1, 2012, and July 31, 2013, compared to the previous one-year period. Rail bound con-tainers are typically headed to consumer markets outside South-ern California, or are export con-tainers taking raw materials or agriculture products to Asia.

These containers account for more than two-thirds of all containerized cargo moving through the Port of Long Beach and reach consumers as far away as Chicago, New York and Asia.

Ocean carriers have the option to move such cargo via other seaports in the U.S., Canada and Mexico. The incentive is designed to encourage them to ferry more cargo through Long Beach and increase the use of rail, which is less polluting than trucks on a per-container basis.

VIT takes first sep in upgrade of terminal operating system

Breakthough for Konecranes with straddle carriers order from Maher Terminals

In May 2012, Konecranes received an order for six strad-dle carriers from Maher Ter-minals LLC in the US. This is Konecranes’ first straddle car-rier delivery to Maher, one of the world’s largest container terminal operators being used by multiple shipping lines and customers. The straddle carriers will be delivered to Maher’s ter-minal in the Port of New York/New Jersey in November 2012. The parties have agreed not to disclose the value of the order.

Maher Terminals LLC has developed the largest marine container terminal in the Port of New York and New Jersey. The highly flexible and efficient container terminal operation is strategically located in the heart of one of the world’s most afflu-ent consumer markets. Maher currently operates a fleet of over 160 straddle carriers.

“We are very pleased that Maher chose Konecranes’ diesel electric straddle carriers to replace aging equipment in its terminal,” says Jost Dämmgen, Sales Manager, Port Cranes, Konecranes. “The state-of-the-art Konecranes straddle carrier combined with service, spare parts, and a training package will surely help our customer reach a higher level of quality and services.”

The ordered straddle car-riers are equipped with Kone-cranes electrical drives and power train components, ensur-ing the highest durability, reli-ability, and performance, while keeping operating and service costs low. The straddle carriers have a hoisting capacity of 40 tons in single container opera-tions and 50 tons in twin twenty operations lifting one over two containers high.

Virginia International Ter-minals Inc., (VIT) in June imple-mented new terminal operating software at the Port of Richmond that provides real-time data on cargo to the terminal operator and customer.

The software, called Navis SPARCS N4, unites the termi-nal’s entire operating system in a single format and provides criti-cal data, in real-time, to its users. At Port of Richmond, which is a barge port leased by the Vir-ginia Port Authority (VPA), the terminal operator will be able to get live information on truck and barge moves.

“Our focus at Richmond was real-time data at the truck gate and pier side using iPads,” said Joe Ruddy, VIT’s chief operating officer. “We’ll be able to transmit and process that data which lets

us know current, exact counts on truck moves in and out of the gate and moves on and off the barge. As well, customers with cargo moving across Richmond will know, to the minute, when cargo arrived or departed.”

Richmond is the first marine terminal within the VPA to launch N4. Since 1994, VPA terminals have been using Navis software on legacy systems. The goal, Ruddy said, is to update the systems at the other VPA ter-minals with N4 and Richmond was a logical start.

The terminal operator at the Port of Richmond is Delaware-based Port Contractors Inc., or PCI. That company has been managing the day-to-day opera-tions at that port since before the VPA leased the facility in 2011 from the City of Richmond.

18 American Journal of Transportation ajot.com

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USDOT Secretary LaHood presents $11.4 million for intermodal rail yard adjacent to Global Container Terminal

The former Greenville rail yard, being developed adjacent to the Global Container Terminal expansion project, will benefit from a U.S. Department of Transportation TIGER grant of $11.4 million to be used for rebuilding and modernizing the facil-ity. The check was presented by USDOT Secretary Ray LaHood and U.S. Senator Robert Menendez, D-NJ, as they stood on the Global facility and looked toward the historic rail yard, which will become SHIF. Also attending was U.S. Senator Frank Lautenberg, U.S. Representative Albio Sires and Bayonne Mayor Mark Smith.

The enhancement of the rail facil-ity will be a significant offering to cus-tomers of the expanded Global facility, scheduled to open in 2014. The terminal will feature new container handling tech-nology that will achieve higher efficiency while improving safety and security for the International Longshoremen’s Association (ILA), AFL-CIO workforce. The techno-logically advanced marine terminal will also improve the competitiveness of the Port of New York and New Jersey with its ability to handle the largest container ves-sels at greater throughput density per acre.

The intermodal facility when com-pleted will allow an additional 250,000 containers annually to be moved to and from ocean-going vessels and double-stack freight trains traveling longer dis-tances between the port and the heartland. The South Hudson Intermodal Facility will enhance the Port of New York & New Jersey’s three existing rail facilities while promoting future growth of inter-modal cargo through the City of Bayonne while reducing the amount of over the road trucks congesting both the Hudson County and regional roadway network.

Reduced use of trucks will also reduce pollution to communities where people live and work. TIGER funds will be used to procure two double-cantilever rail mounted gantry cranes, which will load and unload double-stack rail cars in the 32-car rail car working intermodal yard.

“The DOT TIGER funds places us a giant step closer to the total Global expansion, the total development of Port Jersey peninsula and a superb example of how public and private funding can work together to help such projects evolve,” said James Devine, President and CEO,

Global Container Terminals USA. “It is also a testament to the long-term com-mitment from the Port Authority of New York and New Jersey to protect the port’s continuing role as a leading U.S. gateway for global commerce,” he added.

The Port Authority acquired the land for the project adjoining Global’s exist-ing facility in 2007, ensuring that remain-ing waterfront property would be used for waterfront business. The Global project and the adjacent rail yard will create sig-nificant employment opportunity through both the construction phase and operation of the facility. Richard Larrabee, director of port commerce for the PANYNJ, noted the significant investment made by the bi-state agency in the facility, including dredging, real estate purchase, equipment and involve-ment in the total development. “It will bring this area into the 21st century,” he said.

Integration with the rail facilities creates alternatives and opportunities for containerized goods to access the expand-ing Norfolk Southern Heartland Corri-dor and the CSX National Gateway rail lines. Creation of the SHIF allows direct transfer of rail export and import contain-ers to ocean going vessels without truck drayage through the regions roadways. The project has positive environmental benefits by reducing diesel emissions by reduced truck drayage and implementa-tion of electric stacking cranes. The proj-ect stimulates employment in the local and regional area when unemployment is higher than the national average.

Secretary LaHood made reference to the number of jobs that will be brought to the areas with longshoremen, construc-tion workers, rail yard personnel “and the hundreds of support employees that will come with the anticipated growth in cargo volume.” Mr. LaHood and Sena-tor Menendez spoke also about moving containers off the highways and onto the rails. “The highways are already over-congested,” said the DOT secretary. “This will improve the environment and the situation for cars on the roads.”

At Global, the existing 100-acre marine container terminal is being expanded an additional 70 acres along with the modern-ization of the existing vessel berth along with the expansion of two additional berths. Global Terminal, the expansion area and the

intermodal yard are situated on New York Bay. Ships calling at Global do not transit under the Bayonne Bridge, eliminating air draft limitations. With 50 feet of water depth at its new berths, Global Terminal will be able to handle the largest container vessels in the world. The terminal will have total capacity to move 1.7 million twenty-foot equivalent units (TEU) per year, making it one of the most efficient port terminals in the country based on throughput den-

“The port is South Carolina’s gate-way to global commerce,” said Sen. Larry Grooms, chairman of the Senate Trans-portation Committee and the Review and Oversight Commission on the SCPA. “It would be hard to overstate how much our economic well-being depends on this proj-ect. If we want our state to grow, if we want to welcome new jobs, if we want to succeed on the world stage, our port must stay competitive. This is a major win.”

“The future of South Carolina really is contingent upon the growth of our port, and the Charleston Harbor Deepening Project is an essential part of that,” said Rep. Jim Merrill, vice chairman of the Review and Oversight Commission on the SCPA. “By funding the construction costs of the deepening now, we are show-ing that we as a state are serious about our competitive position relative to other ports in this region and the Port of Charleston’s role as a major player in global shipping.”

Charleston’s Harbor Deepening Project has built considerable momentum since the project’s feasibility study began last summer. Earlier this year, $3.5 million toward the project’s feasibility study was included in the President’s Budget for fiscal year 2013. That allocation, along with the funds already included in the Corps’ Work Plan, means that the federal share of the feasibility study is more than halfway funded.

Already the deepest harbor in the region, Charleston’s deepening project would open the port to the biggest vessels 24 hours a day, under any tidal condition. The Corps stated in its Reconnaissance Study in 2010 that Charleston is likely “the cheapest South Atlantic harbor to deepen to 50 feet.”

sity per acre. Devine said: “We expect to see you all here on April 14, 2014, for the grand opening.”

(COMMITS – continued from page 16)

JULY 16 - JULY 29, 2012 NORTH AMERICA’S TRANSPORTATION & LOGISTICS NEWSPAPER 19

CALENDAR OF EVENTSFor more in-depth calendar & event listings go to www.ajot.com.

To add to the calendar listings go to: cal@ajot.com.

08/25, 08/26 The Freightbook Summit will be held at the Hilton Metropole in London. For more information go to www.freightbooksummit.com or email Rachel Humphrey at rachel@freightbook.net.

09/05 - 09/07 LabelMaster will host its 7th Annual Dangerous Goods Instructors Symposium at the Doubletree Chicago Magnificent Mile. For more information go to www.labelmaster.com/events/dgsymposium or call 800-621-5808 ext. 2201.

09/19, 09/20 The Port of Halifax will host Port Days 2012. For more information go to www.portofhalifax.ca.

09/24 - 09/26 The 4th Cool Logistics Global will be held at the Crowne Plaza in Antwerp. For more information contact Anne Williams at +44 (0) 1932 225632.

Over 100 CONECT members met at the Henderson House in Weston, MA for CONECT’s Annual Meeting. CONECT Counsel, Peter Friedmann held a “Town Meet-ing” forum after which attendees enjoyed an outdoor cocktail reception, dinner, and a raffle that raised over $1000 for the Chafee Memorial Scholarship Fund.

CONECT meets for Annual Meeting

(L to R) Herb & Elaine Rothstein – H. Rothstein & Associates

(L to R) Karen Parkin, Bette Little (both from Adidas Group)

(L to R) Rick Bridges – Roanoke Trade Services, Linda Wood – Bennett & Co., Luiz da Costa – Haemonetics, Roland Shrull – Esq., Middleton & Shrull

(L to R) James Greco – Columbia Coastal Transport, Kristen Whelan – Liberty International, Kevin McDonough – Rhody Transportation &

Wharehousing, Rich Burkett – Columbia Coastal Transportation

(L to R) David Solomon – Boston Freight Terminals, Carter Glass & Alison Leavitt –

Albatrans, Inc.

(L to R) Leticia Vieira – TJX, Gail Kedrus – Apex Logistics,

Rachel Rowells – BJ’s Wholesale Club

(L to R) Andy Rosener, Jen Bailey, Mike Fazio (all from Christmas Tree Shops)

peaked at 226,000 in 2005 before sink-ing 65 percent to 79,000 in 2009 and then rising to 89,000 in 2011.

“We’re not ready yet to declare vic-tory, but by the time we get to the end of the year we’ll probably still be some-where in the neighborhood of 50 percent below our best year ever with lumber,” or 113,000 carloads, Koraleski said. “That’s better than it has been and headed in the right direction.”

Union Pacific is pulling equipment out of storage for the first time since 2008 to move the increased volume of lumber.

Analysts on average expect Union Pacific to report second-quarter earnings

of $1.93, up from $1.59 a year earlier, according to Thomson Reuters I/B/E/S.

They see revenue rising to $5.2 bil-lion from $4.86 billion.

Union Pacific’s peak shipping season, which starts Aug. 1, is also seen registering steady growth this year.

“We’re not really expecting it to be gangbusters, but we’re expecting it to be a little better than last year,” said Koraleski.

Separately, Koraleski said the com-pany awaits word on the results of a National Transportation Safety Board investigation into the June 24 head-on collision of two of Union Pacific’s freight trains in the Oklahoma panhandle that killed three crew members. (Reuters)

The message channels and protocols are critical to this, he said. “The key part of this is moving that trusted shipper con-cept to a data driven analysis. We want to be able to make a determination based on historical data about the shippers plus incorporate the trusted shipper rule sets into ACAS.” He urged forwarders to be part of this process, stating: “The sooner the data is transmitted the better … we sug-gest freight forwarders and carriers con-duct active discussions with all parties in the supply chain as soon as possible to help determine the outcome and help design the process overall.”

Brittin also recognized the impor-tant support industry is giving to further

enhancing air cargo security. He said: “Together we have made significant prog-ress in enhancing air cargo security in the past few years and industry has risen to the challenge, both in the all-cargo and the passenger carrier segments. We are moving steadily toward closing all gaps. What we have put in place—a risk-based, intelligence-driven approach applying tiered screening protocols—could not have been accomplished without working through the numerous details with industry partnership. TIACA and GACAG (Global Air Cargo Advisory Group) have played a key role in this partnership approach, and I am confident that by continuing to work together, we can resolve any outstanding and future security challenges.”

(SECURITY – continued from page 9)

(ECONOMY – continued from page 13)

20 American Journal of Transportation ajot.com

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