Industry Update. Volume 8 Issue 2

Transcription

1 Volume 8 Issue 2 Industry Update The Federal Aviation Administration (FAA) is one step closer to having its authorities fully reinstated, thanks to an agreement forged by House and Senate leaders. Congress is expected to vote on the bipartisan bill, which would fund the FAA s programs through fiscal 2015, before the association s temporary extension expires on February 17 (Air Cargo World). Inside this Issue: 1. U.S. Congress Ready to Pass FAA Bill 2. South Carolina Finds Growth 3. Canadian Truckers Add New Charges 4. Extreme Weather Freezes German Shipping 5. KWE Spotlights 6. U.S & Canada s Joint Ventures to Improve Security 7. Airfreight s Imbalanced Expectations 8. Updated BAF & IFC If the bill is passed, $63 billion will be subsidized to the FAA for safety programs, air-traffic control modernization projects and operational costs. The bill is endorsed by both House and Senate leaders. photo credit: FAA Committee Chairman John Mica (R-FL) states, After a five-year delay and 23 temporary extensions, this measure is key to advancing the nearly 8 percent of our nation s economy impacted by the aviation industry. This bipartisan, bicameral agreement ensures long-term aviation safety and infrastructure funding for the next four years. Mica continues, I commend my colleagues in the House and Senate for working across party lines to come together on this long overdue measure to make needed reforms at FAA, fund programs for constructing major airport infrastructure improvements, and help create jobs for Americans. Continued on Page 2

2 Page 2 Continued from Page 1 In July 2011, 4,000 airline workers were furloughed for roughly two weeks due to a bipartisan dispute. This temporary shutdown affected renovations of air traffic control towers at certain leading airports in the U.S. A long-term bill will prevent similar disruptions in the future. Tom Petri (R-WI), Aviation Subcommittee Chairman says, This legislation will, at long last, provide stable funding and policy direction for the FAA s safety programs, airport development grants and operations. Once in place, the new system will bring about a revolution in aviation, providing greater safety, lower costs, fewer emissions and better on-time performance with shorter, more direct flights. I am very excited about it. South Carolina s port and cities are the new trending hotspot for incoming business on the east coast. According to port statistics, container traffic at the Port of Charleston rose 2.4% and break-bulk traffic at the ports of Charleston and Georgetown increased 54.9% since South Carolina is also increasingly attracting logistics businesses, distribution centers and warehouses for a number of companies. photo credit: Washington Post How is KWE accommodating the growing economy in the area? Ms. Donna Hood, Director of Corporate Sales Development and Marketing, states, KWE is partnering with local and state [South Carolina] chambers of commerce, taking initiative to attend development and port authority meetings to stay abreast of current events and analyzing the needs and wants of new and growing businesses. Ms. Hood continues on to say, We can anticipate not only added visibility of our current and future customers but increasing business opportunities, collaborations and a correlative growth between KWE and incoming industries in the region. photo credit: panoramas.com

3 Page 3 Local Canadian media reports that some Quebec truckers have already implemented traffic surcharges and several others are expected to follow suit with these congestion charges on deliveries into Montreal. According to the Quebec Trucker Association, the delivery personnel cannot absorb the costs of the traffic jams that have been plaguing the Montreal area. The jams cost delivery companies extra fuel and man hours. Additionally, Canadian laws limit the number of hours a driver can spend on the road. When the limit is reached, truckers are forced to return to their home base with the undelivered merchandise to swap drivers. photo credit: nj.com The KWE Italia office has moved. Their new address and contact numbers are: Kintetsu World Express (Italia) Srl Edificio Spedizionieri - 1 Piano - Stanza 18/a Via Mario Castoldi Snc. Cargo City Fiumicino Aeroporto. Roma. Italy Tel: Fax KWE Korea will utilize the new Automated Manifest System (AMS) service beginning June 1, 2012 instead of the originally intended date of January 1, AMS will be requested for every departing shipment. And if sent via the Electronic Data Interchange (EDI), every airline will possess the AMS information at least four hours prior to the shipment s arrival. For more information and updates on KWE Korea, Please visit: The coldest February temperatures to sweep across Europe in nearly three decades bring barge shipping to a halt through much of the continent s inland waterway system. Germany was forced to shut a canal linking the river Rhine to Hamburg, Europe s second largest container port. Additionally, the closure on Feb. 10 cut Berlin from the German inland waterway network as well as a second waterway connecting the Rhine to the canal system which was also closed on Monday. Prolonged closure of the Rhine can quickly impact deep-sea port traffic and intermodal shipments. This river is Europe s busiest inland waterway and handles over a million containers annually as well as iron ore, coal and grain. Shipping is also disrupted on long stretches of the 1,785-mile-long Danube River, which passes through 10 countries and connects Germany with southeastern Europe and Ukraine. Romania began shutting down sections of the river earlier this month, totaling 440 miles by Friday and has impacted the transportations of bulk commodity and oil products. Austria, Croatia, Hungary, Serbia and Bulgaria also halted shipments on the Danube.

4 Page 4 KWE Singapore was highlighted in the fourth quarterly issue of Transported Asset Protection Association (TAPA Asia). Below, please find the article : photo credit: TAPA Asia TAPA Asia is a non-profit organized of security professionals from representatives of different industries such as electronics & semi-conductor manufacturers, high-tech, freight forwarders and professional consulting companies. They address a variety of security threats common to the technology industry. For more information, please visit:

5 Page 5 photo credit: zimbio.com U.S. President Barack Obama and Canadian Prime Minister Stephen Harper have agreed to implement two action plans designed to speed up legitimate trade and travel, improve security in North America and align regulatory approaches between the neighboring countries. Both countries will finalize negotiations later this year on a preclearance arrangement in land, rail and marine modes of transportation. Finalizing these negotiations will provide legal frameworks and reciprocal authorities, both necessary for the Canada Border Services Agency and U.S. Customs and Border Protection to effectively carry out security measures, facilitation and inspection processes in the other country. Food safety, animal and plant health regulators from the U.S. and Canada will work on other joint efforts. The countries agreed to join the U.S.-based Customs-Trade Partnership Against Terrorism (C-TPAT) program and Canada's Partners in Protection (PIP) program. In conclusion, Canada agreed to develop an interoperable communication portal similar to that in the U.S. by December Participation in both programs is voluntary for importers, although PIP includes import compliance provisions that are not part of C-TPAT. Did you know? KWE USA is C-TPAT Validated KWE Canada is PIP Certified 19 KWE airport warehouse facilities received the highest level of certification, Classification A from TAPA (Transported Asset Protection Association)

6 Page 6 Air Freight's Imbalanced Expectations The trans-pacific market appears to have taken a turn. In a reversal of the established traffic patterns of the past three decades, U.S. exporters with air freight going to Asia are facing the prospect of bottlenecks, delays and rate increases. On the other hand, shippers moving air cargo from gateways such as Hong Kong to North America have had no problem finding space at competitive prices. Forwarders in North America are bracing for tight capacity to Asia in the coming weeks as a result of lackluster demand for eastbound freight. As common each year, airlines have adjusted back trans-pacific freighter flights since the start of the Lunar New Year break in Asia (Jan. 23), but this time there is widespread uncertainty regarding when and if these flights will resume. Airline schedules are driven by demand coming out of Asia, which has been tame. Combined with overcapacity, this pushed down yields, making carriers wary of flying freighters to North America or Europe with less than full loads. Last year, when yields were higher, soft demand out of China in the aftermath of the holiday break prompted Chinese airlines to cancel many U.S.-bound freighter flights. The airlines are in higher precarious situation now and carriers have made it clear that they will not fly at a loss, a lesson everybody learned during the last downturn. Industry consultants predict further capacity reductions through the collapse of secondary carriers or the parking of freighters. Most carriers ground their expensive assets as a last resort but many have spoken of consolidating routes which would reduce capacity and affect transit times. Cutting the capacity 5% - 10% might trigger serious backlogs, pushing forwarders to find alternative ways to move freight to Asia. Singapore, Bangkok and Osaka are challenging destinations since direct lift from the U.S. to these markets are limited. For indirect routings, U.S. exports compete with intra-asia shipments for these destinations, sometimes experiencing three-day backlogs to certain cities in Asia. Capacity constraints are bound to affect pricing levels although forwarders say rates have been stable. This can change, however, if capacity removed over Chinese New Year remains on the sidelines afterwards.

7 Page 7 WESTBOUND (from USA to Asian destinations) January 1, 2012 through March 31, dry dry 20 reefer other reefer BAF West Coast BAF East Coast IFC Pure truck IFC Truck/Rail EASTBOUND (from Asian origins to USA) January 1, 2012 through March 31, 2012 per 20 per 40 per 40HQ per 45 BAF West Coast BAF East Coast IFC-Truck IFC-RIPI IFC-IPI Transpacific Ocean (Asia to Canada) February 1, 2012 through March 31, 2012 CAF: 7% per 20 per 40 per 40HC BAF February Holiday Schedule 20 Family Day- Canada Businesses & Government closed in Ontario 20 President s Day- U.S.A KWE Offices Open