Western rails get ready to redraw intermodal map

UP, BNSF target millions of truckloads for conversion to rail.

The two Western rail giants, Burlington Northern Santa Fe Railway and the Union Pacific Railroad Co., are positioning themselves to capitalize on a potential bonanza: The conversion of millions of truckloads mostly moving west of the Mississippi to domestic intermodal service.

Omaha, Neb.-based UP estimates that approximately 11 million truckloads shipped within its service territory are candidates for conversion to domestic intermodal service. About 3 million of those move in UP's 10 primary domestic corridors, according to the railroad. Fort Worth, Texas-based BNSF projects that 7 million truckloads in its territory are candidates for conversion. In 2010, BNSF handled between 2.25 and 2.5 million domestic intermodal loads, while UP handles, on average, about 2 million a year.

The Western rails, which like their brethren in the East have been criticized in the past for overstating the reliability of their intermodal service, say they have brought their infrastructure, rolling stock, and terminal capacity up to levels where they can now compete with trucks on most traffic lanes and at lengths-of-haul as short as 700 miles, well under their traditional 1,500- to 2,000-mile movements.

For the rails' senior intermodal executives, the prospect of converting 18 million truckloads to intermodal is sufficient motivation to get it right.

"We have a unique opportunity, and the opportunity is huge," says Steve Branscum, BNSF's group vice president, consumer products marketing.

The efforts by the Western rails—along with similar strategies being employed by their two Eastern counterparts, CSX Corp. and Norfolk Southern Corp.—represent a fundamental change in how the industry has marketed and operated its intermodal business. For decades, domestic intermodal operations were viewed as a "bolt on" to international service that involved a prior or subsequent ocean freight movement. Over the last decade, domestic intermodal has grown as a stand-alone service, but mostly from east to west and over lengthy distances. Eastbound intermodal movements remained mostly an extension of ocean service linking West Coast ports with inland points.

Today, however, challenges ranging from high fuel prices to fears of a driver shortage to highway congestion are forcing more truck shippers to consider domestic intermodal as an alternative, regardless of location. The increasing demand is fast making domestic the tail that wags the intermodal dog. UP, for example, reported a 17-percent increase in 2010 domestic intermodal volumes over the prior year. BNSF's 2010 domestic intermodal traffic volume rose 4 percent over 2009 levels. However, first-quarter domestic traffic grew 13 percent over the same period in 2010.

In the first quarter of 2011, domestic service accounted for 46.7 percent of total intermodal volume, slightly higher than full-year 2010 figures, according to the Intermodal Association of North America (IANA).

Hurdles to clear
But with the growth and opportunity come challenges, especially as the railroads become more aggressive in the 600- to 1,000-mile lane segments long dominated by over-the-road truckers. To be "truck-competitive"—which railroads define as competing with a solo driver on short and long hauls—railroads have to ensure their own networks, as well as those of the draymen responsible for bringing goods to the intermodal ramp, are synchronized to deliver fast, consistent service at lower price points than trucks can offer.

Many of those short- to intermediate-distance segments are located in what are known as "secondary markets" that lie outside of the railroads' primary corridors. It is in these lanes that the rails' intermodal efforts have been hurt by a lack of significant traffic density and a less-robust infrastructure relative to their primary corridors.

David Howland, vice president of land transport services for third-party logistics giant APL Logistics, says the railroads have made significant speed and reliability improvements in their intermodal operations, and can now compete with trucks across the country better than ever before. However, Howland notes that intermodal service in the secondary markets—he cites the Ohio Valley–Kansas City corridor as an example—still needs work and will require significant investment by industry, government, and private sources to get up to speed.

Matt Gloeb, UP's assistant vice president of domestic intermodal, says the railroad is committed to the secondary markets and is addressing the concerns over service inconsistency. "The 11 million highway conversion truckload opportunities [for] Union Pacific include secondary markets that we are targeting," he says.

Gloeb says of UP's 10 primary corridors, only the Los Angeles–Seattle and Los Angeles–Houston lanes are not yet at service levels where they can regularly compete with trucks. The rail is expected to reach service parity on the two lanes by the end of the year, Gloeb says.

Another challenge for the railroads is convincing truck shippers that domestic intermodal can work for them and, perhaps more importantly, that the rails can deliver on their service commitments. UP and BNSF say with their physical networks in place, it now becomes a matter of persuading prospective intermodal customers to come on board, getting existing intermodal users to use more of it, and assuring both new and current customers that they can rely on it to do the job.

Branscum of BNSF says most of his company's customer base relies on intermodal for only about one-quarter of their total transport needs.

"A lot of customers keep freight on the highway because they don't think there's an intermodal solution," Branscum says. Gloeb of UP adds that the reluctance of shippers to convert to intermodal is largely due to "an issue of confidence" in the quality of rail service.

As part of its marketing effort, BNSF earlier this year stepped up its "Next Generation" program, launched in 2010, in which it works closely with intermodal providers to educate shippers on the benefits of the service, Branscum says.

Rates on the rise?
Education aside, intermodal users will be paying more for the service this year than they have in several years. Projections range from between 3 and 8 percent, with the high end being significantly above the increases expected to come from the truckload carriers. At a recent industry conference sponsored by New York City investment firm Wolfe Trahan, a panel of executives from the "Big Four" intermodal marketing companies—Hub Group Inc., Schneider National Inc., J.B. Hunt Transport Services Inc., and Pacer International Inc.—predicted rate increases of between 3 and 5 percent, with Schneider saying rates could go higher than that, according to a post-meeting report published by the firm.

The rails are well aware that in a climate of elevated diesel fuel prices, road congestion, and driver and capacity shortages, the intrinsic economics of intermodal service afford them some degree of pricing leverage. However, Branscum says the increases, if any, will just narrow the rate gap between intermodal and more-costly over-the-road service.

"If intermodal was discounted at 15 to 20 percent compared with over-the-road, then the increases might reduce the discount to 5 to 10 percent," he says.

Another issue that could affect intermodal rates is the availability of the containers in which most domestic intermodal traffic moves. Faced with a global shortage of ocean containers, steamship lines arriving at a U.S port of entry may want to trans-load inbound freight into domestic containers rather than have the international boxes moved "intact" to inland points. That could put additional pressure on an already-tight domestic container market, some analysts contend.

However, the four intermodal companies participating in the Wolfe Trahan conference say they are adding thousands of containers between now and the start of the peak holiday shipping season. UP, which controls about 60 percent of the domestic container fleet, added 14,000 containers in June 2010 to container pooling arrangements it has with CSX and Norfolk Southern. As of now, UP has access to 63,000 containers, according to Gloeb.

While there are many variables that could disrupt the railroads' best-laid plans to capture domestic intermodal share, what is clear is that a growing number of shippers are interested in at least exploring what the rails have to offer. Howland of APL Logistics, whose company is booking an increasing volume of domestic intermodal freight, says customers using intermodal for 15 to 20 percent of their traffic are looking to boost that ratio as high as 50 percent. Some shippers, Howland says, are looking at intermodal to move as much as 70 percent of their merchandise traffic.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

Tips to beat the truckload capacity crunch

For the thousands of companies that rely on the nation's trucking network to get their goods to market, perhaps no issue in the past five years has become more critical than capacity.

Available truckload capacity is dearer than at any time since the middle of the last decade, experts say. While the reasons for the shortfall are manifold—a weak economy that forced truckers to sideline rigs, a shortage of available drivers, rising operating costs, and a lack of adequate credit for carriers to replace aging equipment or expand their fleets—the fact is, rig counts are down by as much as 15 to 20 percent from their 2006 peaks.

With capacity limited and demand firming after a four-year freight recession, carriers can afford to be more selective about the freight they'll accept. They also have greater leverage when bargaining with customers over rates. For many shippers, this raises the twin problems of securing the capacity they need and how much they'll have to pay for it if and when they do.

Shippers who've adopted a tactical rather than strategic mindset are likely to encounter the most difficulty obtaining needed capacity, according to a recent study by C.H. Robinson Worldwide Inc., the nation's largest freight broker. These shippers, according to Robinson, share several traits that carriers view as red flags: They switch back and forth between carriers in search of the cheapest deal; they confine the topic of carrier discussions to rate matters, and they ignore carrier complaints about service issues such as long loading and unloading times, and freight that is difficult to handle.

These shippers also "time the market" in an effort to lock in rates at what they believe to be the absolute bottom. This approach often backfires, according to Robinson. Not only do shippers get in at the wrong time and end up paying more over the long run, but they alienate their carriers by failing to care what impact their decisions have on the trucker's business, Robinson said.

Beating the capacity crunch won't be easy. But it's not an insurmountable problem, experts say. The road to restoration begins with a change of attitude. What follows are some tips on developing the right mindset for long-term success:

Be real, and be fair. Shippers need to frame capacity discussions in terms of what works well for both parties, as opposed to engaging in a zero-sum game where one benefits at the expense of the other. "Seeking alignment between business goals and outcomes of both shippers and carriers can result in better rates and exceptional service over time," concluded the Robinson study.

One of the most important tenets for shippers is to be truthful about the traffic they tender. During the procurement process, shippers may make their freight look better than it really is, Robinson said. But if carriers discover that the freight isn't available at the right times or is difficult to handle, they may choose to accept someone else's freight instead. If the primary carrier doesn't take the freight, the shipper may find himself in a bind. As the shipper goes down the service guide in search of providers, he's likely to find that his rate and service options become increasingly less attractive, the study concluded.

On the other hand, if the shipper doesn't disclose the attractive qualities of the freight, the carrier may "assume the worst" and price capacity at less-than-optimal rates, Robinson said.

Be consistent. Gough Grubbs, senior vice president, distribution/logistics for national retail chain Stage Stores Inc., advises shippers to try to spread their loads over an entire month, rather than compress them into a one-week period at the end of the month. This rewards a shipper's core carriers—the ones offering the best price-service matrix—by allowing them to better plan their schedules and thus carry more loads, Grubbs says.

"Carriers favor consistency in their customers," Grubbs says. "When capacity is tight, [carriers] will take care of the 'steady' load customers before the erratic load orders." He adds that shipper consistency can result in better rates because carriers prefer a steady revenue flow to higher-priced but less-predictable freight.

The mantra of consistency should apply to the procurement process as well. According to the Robinson study, shippers should conduct a procurement exercise once a year without fail, and do it at the same time each year. This gives service providers a better idea of future demand, so they can develop annual strategic plans that keep them from getting stuck in a bad situation for an extended period of time, Robinson said.

With an annual plan in place, providers are "far more likely to adapt to all types of market changes, continue to accept shipments, and provide quality service," the study said. Perhaps most important, shippers who follow this template "build credibility in the market as reliable, even-handed customers," it noted.

Be flexible. Dave Howland, vice president, land transport services for third-party logistics giant APL Logistics, advises shippers to relax their pickup and delivery rules to accommodate drivers if necessary. "Nothing burns up drivers, and costs more, than drivers' sitting idle, waiting to make a pickup or delivery," he says.

If they're given longer lead times to respond to orders, carriers can do a better job of capacity planning and synchronizing driver availability with customer loads, Howland says.

Be automated. It may sound like an obvious statement given their demonstrated benefits, but there is no substitute for transportation management systems (TMS) when it comes to monitoring a transportation and logistics operation. From carrier performance data to order-level reporting to savings analyses, these systems provide unbiased information on virtually everything a shipper needs to know. A TMS allows shippers to benchmark real costs with historical and planned costs. Without this insight, "it won't be clear why a plan succeeded or failed to meet the budget at the end of the year," the Robinson report said. It also gives service providers the insight they need to perform at higher levels, the study said.

TMS services are readily available through multiple channels—including the budget-friendly Web-hosted model—and their value has hardly been kept under wraps in the industry and the media. Yet Grubbs of Stage Stores says the software is not as widely used as you might expect. "I'm amazed at how many shippers I've talked to who do not use a TMS," he said. "It's the secret sauce."

Be collaborative. Just because companies compete on the store shelf doesn't mean they can't share supply chain resources. Grubbs suggests shippers collaborate to create round trips out of one-way hauls and combine freight to create "continuous move" truckloads rather than settling for more costly less-than-truckload (LTL) movements. Grubbs says the two strategies lessen the need to find new capacity since space already exists for one leg of the circuit. Participants also stand to reap considerable savings because round trips are generally cheaper than one-way hauls, and truckload services typically run as much as 40 percent per hundredweight below the price of LTL.

Grubbs also advises shippers that use "pool distribution" services for their outbound transportation (shipments from DCs to stores) to negotiate reduced rates with carriers to pick up backhaul loads from suppliers located near the carriers' outbound destinations. This not only results in savings for the shipper, but also benefits the carrier by reducing the number of unproductive empty miles. And both sides benefit by utilizing truck capacity that's already been allocated..

Historically, the shipper community gets creative when its collective back is to the wall.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

Shippers Expect 9 Percent Boost in Transport Spending

Second quarter

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survey finds shippers bracing for higher rates, surcharges

Shippers are bracing for higher transportation costs, even as the economy slows, according to a second-quarter survey of more than 2,000 logistics managers.

On average, the shippers expected their transportation budgets to rise 9 percent over the next year, as tighter capacity pushes rates higher across modes, according to the survey by the Wolfe Trahan equity research firm.

The biggest price hikes will come in intermodal and rail rates, logistics managers said in Wolfe Trahan's quarterly survey of shippers.

On average, shippers expected intermodal rates to increase 4.2 percent over the next 12 months, with rail rates rising 3.8 percent, Wolfe Trahan said.

Shippers expected truckload rates to increase 3.5 percent in that period, while less-than-truckload pricing will rise 2.5 percent, according to the survey.

Truckload giant Swift Transportation expects to raise its contract rates 4 percent this year, the CEO of the $2.9 billion trucking operator said May 27.

Ocean container rates will rise 1.9 percent over the next year, according to the shipper survey, while heavy airfreight rates accelerate 4.8 percent.

Fuel surcharges will account for a large portion of the 9 percent increase in transportation spending forecast through early 2012, Wolfe Trahan said.

“We also believe higher budget expectations reflect higher volume and pricing increases than previously expected,” the transportation research firm said.

 

Regards, 

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand 

 

 

The End of Mail

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Well it seems a farewell may be in order for USPS. The USPS has 571,566 full-time workers, making it the country's second-largest civilian employer after Wal-Mart Stores (WMT). It has 31,871 post offices, more than the combined domestic retail outlets of Wal-Mart, Starbucks (SBUX), and McDonald's (MCD). Last year its revenues were $67 billion, and its expenses were even greater. Postal service executives proudly note that if it were a private company, it would be No. 29 on the Fortune 500.

The problems of the USPS are just as big. It relies on first-class mail to fund most of its operations, but first-class mail volume is steadily declining—in 2005 it fell below junk mail for the first time. This was a significant milestone. The USPS needs three pieces of junk mail to replace the profit of a vanished stamp-bearing letter.

During the real estate boom, a surge in junk mail papered over the unraveling of the postal service's longtime business plan. Banks flooded mailboxes with subprime mortgage offers and credit-card come-ons. Then came the recession. Total mail volume plunged 20 percent from 2006 to 2010.

We don’t think the mail volume will return and that we will be seeing the finality of a dinosaur...

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

Oil rose 2 percent on Tuesday in choppy trading after Goldman Sachsraised its price

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Oil rose 2 percent on Tuesday in choppy trading after Goldman Sachs raised its price forecasts for Brent crude, saying demand from economic growth will eat into stockpiles and OPEC spare capacity.

Goldman raised its Brent price forecast to $115, $120 and $130 a barrel on a three-, six-, and 12-month horizon and boosted its year-end target for Brent to $120 per barrel from $105 and its 2012 forecast to $140 from $120.

A weaker dollar also supported oil prices, which had declined 2 percent the previous session.

The euro edged up from a two-year low against the dollar on German data that was better than expected, though nagging fears about Europe's debt crisis were expected to check euro gains.

Brent crude for July delivery rose $2.43 to settle at $112.53 a barrel, having swung between $109.50 and $112.65.

U.S. July crude rose $1.89 to settle at $99.59 a barrel, having pushed intraday as high as $100.09 and ending above its 100-day moving average of $98.80.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

EU Raids Shipping Companies in Anti-Trust Probe

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BRUSSELS—The European Commission raided the offices of shipping lines in a probe of possible price fixing, the first step in an investigation that could lead to fines totaling more than a billion dollars.

Denmark’s A.P. Moeller-Maersk A/S, the world biggest container carrier by volume; No. 2 CMA-CGM SA of France; and No. 4 Hapag-Lloyd AG of Germany said officials visited their headquarters unannounced on Tuesday and requested documents.

The commission said it “has reason to believe that the companies concerned may have violated the antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position.”

The subject of the search: a rebound in container shipping rates in 2009 that confounded simple supply and demand.

Maersk, CMA and Hapag said they were cooperating with the investigation and that they comply with competition rules. A smaller line, Hamburg Süd, issued a similar statement. No. 3 shipping company Mediterranean Shipping Co. of Switzerland couldn’t be reached.

‘For several years we have implemented our compliance program which includes guidelines and training of employees etc. in order to ensure, to the widest extent possible, that our employees are aware of legislation and how to adhere to it,” Maersk said.

The investigation, in cooperation with national authorities, “are a preliminary step into suspected anticompetitive practices,” the commission said. The inspections don’t mean that the companies are guilty, said the commission, the EU’s executive arm.

Since China revved up its export machine in the 1990s, the container-shipping sector has been one of the world’s fastest growing businesses, expanding around 10% a year.

Increasingly, transporting 20- and 40-foot steel containers across oceans has become the standard for moving everything from bananas to electronics around the globe. Ports built new docks. Canals were widened. Carriers ordered hundreds of bigger ships. The number of ships at sea able to carry over 10,000 20-foot containers or their equivalents increased to 48 this year from 15 in 2009. Next year, it will be 61.

But amid that growth came the global financial crisis. Trade in 2009 suffered its worst decline, 12% by value, since World War II. That led analysts to predict a collapse in rates and that at least one shipping line in the top 20 would fail.

That didn’t happen. In January 2009, the index price for shipping a 40-foot container was $1,603. A year later it was $2,517. It has since softened slightly, to $2,436.

“Traditional rules of economics have long not applied to the shipping industry,” said Ashley Craig, a transportation lawyer with Washington-based Venable LLP.

That triggered the curiosity of antitrust investigators in Brussels and Washington, as The Wall Street Journal reported last June. The U.S. Justice Department and Federal Maritime Commission have cooperated with European Union officials, but haven’t announced their findings. EU cartel investigations, which are run by the European Commission, can take years to conclude.

Shipping-industry customers, freight forwarders and other middle men have filed complaints with the EU and the U.S.

According to shipping-industry executives, rates increased because shipping lines laid up vessels, levied surcharges and cut the speed of their ocean crossings, a practice known as slow steaming, which can cut capacity by 5%.

The question, investigators said, is whether the companies acted alone or together. The shipping companies said they acted independently.

The EU in 2008 abolished a long-standing price-fixing exemption for shipping companies. “After the lifting of the exemption, carriers have continued announcing what they want to do their rate levels in the press, which has been described as signaling,” said Dirk Visser, an analyst with Netherlands-based Dynamar BV.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

TMS market is on the mend following recession

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TMS market has "bounced back" after the global recession, growing faster than the rate of inflation in 2010, with significant growth forecasted through 2015.

The market for Transportation Management Systems (TMS) appears to be heating up again, according to data released this week by ARC Advisory Group.

The TMS market has “bounced back” after the global recession, growing faster than the rate of inflation in 2010, with significant growth forecasted through 2015. SCS agrees with the finding as we are finding that TMS multitenant solutions that leverage the network remain a key growth driver for our solution.

ARC maintains that transportation is inherently a “multi-partner collaborative endeavor,” with networked-style solutions such as SaaS (Software-as-a-Service) leveraging multitenant architecture used to facilitate things like:
* high-quality electronic communication with partners;
* quicker on-boarding of new partners;
* enabling efficiencies in transportation procurement;
* improvement in freight audit and pay; and
* the ability to leverage data from the network to provide benchmarking data.

“The primary advantages of multitenant networking solutions are that the data cleansing issues largely disappear,” Banker said in an interview. “Secondly, the network can be leveraged.  If you are dissatisfied with a carrier on a lane and need a new one, there is a good chance that carrier is in the network and you can start quickly tendering loads via EDI without having to set up one to one connections.  Most companies don’t want to be in the EDI data cleansing business.”

Banker noted that the sectors that are leveraging TMS more so than others are third-party logistics organizations.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

U.S. can't handle a major increase in exports

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The current state of U.S. infrastructure is not adequate to support President Obama's push to double export volumes over the next five years, according to a leading industry economist.

Speaking May 5 at the Virginia Maritime Association's annual International Trade Symposium, Walter Kemmsies, chief economist for Moffatt & Nichol, an engineering firm specializing in transport and infrastructure issues, said the country lacks the "infrastructure to support increased exports" and that without significant changes to the transport system, the United States "will choke on our economic growth."

One problem, according to Kemmsies, is that an infrastructure built around moving containerized import traffic from the West Coast to inland population centers may no longer fit shifting trade and transportation patterns. Inbound containers currently travel to urban areas with large consumer markets. However, most export traffic originates in rural areas where containers are not readily available, Kemmsies said. The often-prohibitive costs of repositioning empty containers or bringing exports to the existing infrastructure have forced some U.S. exporters to shift from containers to bulk shipping methods, said Kemmsies.

"We need more infrastructure to support containerized exports... including building more [bulk-to-container] transfer facilities at ports and more intermodal systems in agricultural areas," Kemmsies said.

Kemmsies told the group that ocean carriers' use of slow steaming to minimize fuel usage is a major reason for West Coast ports' recent gains in market share. It has become faster to drop containers on the West Coast and ship them by intermodal rail to the East Coast than to slow steam to the East Coast, he said. As transportation costs continue to rise, companies with time constraints are finding it more advantageous to ship through the West Coast again, he said.

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

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Carriers, Ports Heighten Security

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Carriers and ports notched up their security programs Monday morning following the announcement that U.S. special forces killed Osama bin Laden on Sunday.

"We generally heightened security overall," said William Ferguson, director for security at NYK Line (North America) in Jackson, N.J. "When there's news like this, we generally begin to look around more, and keep our Blackberries on."

The Department of Homeland Security so far has not issued a specific warning to freight carriers.

Two weeks ago Homeland Security put a new incident warning system into effect, abolishing the five-step color code system that had been in place since 2002. Under the National Terrorism Alert System, the department now sends out advisories in case of an "elevated threat" or "imminent threat" of a terrorist attack.

"We remain at a heightened state of vigilance," DHS said Monday morning. "Secretary Napolitano has been clear since announcing NTAS in January that we will only issue alerts when we have specific or credible information to convey to the American public. Our security posture, which always includes a number of measures both seen and unseen, will continue to protect the American people from an evolving threat picture both in the next days and beyond."

An official with the International Air Transport Association said the organization had not received any word from DHS. The Air forwarders Association hasn't either, but expects the Transportation Security Administration to issue a notice later Monday, said President Brandon Fried.

"TSA sees air cargo a significant threat," Fried said. "All the hard work, dedication and rules will definitely help keep the skies safe." He said that other countries as well are taking steps to protect their citizens.

Seaports are taking precautions, but the American Association of Port Authorities had no concrete information to share with members, said spokesman Aaron Ellis.

"Port security people are aware of the circumstances, but we're awaiting guidance from DHS as to what to do," Ellis said.

Chris Ward, executive director of the Port Authority of NY & NJ, released the following statement:

"In light of the events that are unfolding, the Port Authority has directed its police to increase its presence at all Port Authority facilities, including the World Trade Center site, and to coordinate with local, state and federal law enforcement as required. This response is not based on a current threat, but out of an abundance of caution until we have the chance to learn more. In the meantime, all Port Authority facilities remain fully operational and at normal service levels."

Regards,

Leslie G. Brand III | Chief Executive Officer|  

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Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

YRC Worldwide Reaches Restructuring Agreement

Trucker’s partners approve plan that would make lenders majority stockholders

New debt restructuring agreements YRC Worldwide reached with lenders and pension funds will allow the carrier to meet a key deadline in its bid to avoid bankruptcy.

The company announced late Friday more than 95 percent of its lenders approved the restructuring plans, along with all of its multi-employer pension funds.

The agreement includes an exchange offer that will give the company’s lenders approximately 72.5 percent of the carrier’s common stock after the restructuring is complete.

The company’s existing shareholders would retain approximately 2.5 percent of the company’s outstanding common stock, subject to further dilution by a management incentive plan and the conversion of certain new securities, the company said.

The agreements signed Friday also anticipate $100 million in new capital through additional stock sales, and increased liquidity from a new asset-based loan facility.
The restructuring agreements are scheduled to be in place by July 22.

The agreements cleared a potential obstacle to financial restructuring at the nation’s largest pure trucking operator, which has lost more than $2.5 billion since 2006.
Teamster multi-employer pension plans in March said they wanted a higher interest rate on deferred pension obligations owed by YRC Worldwide.


Leslie G. Brand III | Chief Executive Officer|  
Phone: 616.554.8900 Ext: 106 | Cell: 616.836.7074 | Toll Free: 877.554.8900 | scsolutionsinc.com |Skype:lgbrand

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