Shippers Insider Nov - Dec 2012

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PRSRT STD U.S. POSTAGE PERMIT #4109 INDUSTRY CA PAID LONGSHOREMAN STRIKE Delivering Insightful Logistics News $4.95 USD Nov - Dec 2012 Retailers Open E-Commerce DC’s to Compete With Amazon + Trade Data + Chinese Economy

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Magazine covers aspects of logistics that include Truckload, LTL, Ocean/Air, Warehousing, Repairs, Customs, and Technology.

Transcript of Shippers Insider Nov - Dec 2012

Page 1: Shippers Insider Nov - Dec 2012

PRSRT STDU.S. POSTAGE

PERMIT #4109INDUSTRY CA

PAID

LONGSHOREMANSTRIKE

D e l i v e r i n g I n s i g h t f u l L o g i s t i c s N e w s

$4.95 USD

Nov - Dec 2012

Retailers Open E-Commerce DC’s to Compete With Amazon + Trade Data + Chinese Economy

Page 2: Shippers Insider Nov - Dec 2012

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Page 3: Shippers Insider Nov - Dec 2012

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CoNteNtSSHIPPersINSIDERNov - Dec 2012

812

Retailers Open E-Commerce DC’s to Compete With Amazon

14

Longshoreman Strike

FedEx, UPS to Lift China’s Domestic Market

U.S. Intermodal Volume Rises, Carload Traffic Falls

Intra-Asian Shipping Forecast

China’s Changing Economy Slowing Export Growth

Trade Data

68

12 14 182124

>> LogIStICS reportS

Page 4: Shippers Insider Nov - Dec 2012

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Page 5: Shippers Insider Nov - Dec 2012

218 Machlin Ct., Walnut, CA 91789

347 Stimson Ave., City of Industry, CA 91744

900 Turnbull Canyon Rd., City of Industry, CA 91745

15210 Nelson Ave., City of Industry, CA 91745

22067 Ferrero Pkwy., Walnut, CA 91789

19201 Reyes Street, Rancho Dominguez, CA 90221

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Page 6: Shippers Insider Nov - Dec 2012

Retailers are continuing to expand into the realm of e-commerce, in direct competition with Amazon.com. New distribution centers for brick and mortar retail businesses are driving the growth of e-commerce distribution space. According to IMS Worldwide President Curtis Spencer, online retailing is outpacing traditional brick and mortar sales in growth by 5 to 1. Traditional retailers are jumping on the bandwagon, according to Spencer. “E-commerce is on everybody’s radar because it’s growing like a flipping weed.”

According to the United States Department of Commerce, e-commerce sales are up 15.3 percent year over year for both the first and second quarters of 2012, holding 5.1 percent of market share for the second quarter and 4.9 percent of the first. This kind of growth is expected to continue, with e-commerce projected to capture 30 percent of market share, totaling $2.7 trillion annually, by 2025.

Shifting to a model that includes a significant percentage of their income from e-commerce means a change in focus for retail distribution. Stores like Sears used to believe that retail and online sales should be kept separate, but are now pushing more orders through their traditional distribution networks and even fulfilling online orders at retail locations. Although Sears cannot compete with Amazon.com’s huge distribution network,

these responses to next-day delivery and free shipping are driving a move to consolidate retail supply chains in an effort to increase distribution efficiency.

Retail stores with significant e-commerce sales are opening new distribution hubs where full-time skilled workers and part-time seasonal help are plentiful and ports and rail are easily accessible. Carter’s, maker of OshKosh B’Gosh brands, recently opened a one million square foot distribution hub in Braselton, Georgia. This site is expected to save the retailer over $17 million because of sales tax exemptions on equipment purchases and job

tax credits, among other incentives.

Another vital component for e-commerce distribution hubs is a location within a Foreign Trade Zone, making shipping to overseas locations more profitable. Goods produced in these zones are not subject to tariffs until they leave the zone, bound for other parts of the United States. Merchandise shipped to foreign markets is completely duty-free and some merchandise is exempt from state and local inventory taxes, making Foreign Trade Zones ideal for e-commerce retailers with international customers.

E-commerce hubs ideally also require access to FedEx and UPS air and ground freight hubs as well as zone skipping, in order to allow them to ship smaller loads to the parcel carrier, who handles distribution the rest of the way. Carter’s location is ideally located to maximize the company’s logistics dollars, plus it offers the additional bonus of being free of online sales tax, saving their consumers this added cost. Coupled with more intelligent technology, this distribution center should be able to meet the needs of Carter’s online customer base and serve as a model for other retailers interested in plunging into this realm.

SHIPPERS InSIdER 6 LOGISTICS rEPOrT

Retailers Open E-Commerce DC’s to Compete With Amazon By Kristi WaterWorth

Page 7: Shippers Insider Nov - Dec 2012

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Page 8: Shippers Insider Nov - Dec 2012

headed toward an amicable agreement, but that bargaining was extended to the end of December “for the good of the country.” Distancing the labor dispute from the peak shipping season “will provide the parties an opportunity to focus on the outstanding core issues in a deliberate manner apart from the pressure of an immediate deadline.”

Although the ILA and USMX negotiations have only been making headlines since the threat of strike reared its ugly head, these talks began in March. Over 14,500 workers are engaged in this struggle to come to some kind of agreement that both sides find reasonable. The exact terms that have stopped negotiations on several occasions remain undisclosed, but reasons cited include: wages and benefits, modifications to work rules and port automation, a move that union members see as a direct threat to their livelihood.

Everyone who relies upon the ports along the East and Gulf Coasts is breathing easier, at least temporarily, now that the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have agreed to extend new labor contract negotiations past the end of the Holiday Season. The threat of work stoppage from the ILA is no less potent now than it was before the postponement, but the economic waves that might be caused by such a move should be minimized by the new December 29 deadline. Well past the end of the biggest shopping season in the United States, this new deadline will allow the ILA and USMX the freedom to properly negotiate a new contract without the added pressure of disrupting the already weak global economy.

A statement by the Federal Mediation and Conciliation Service Director George H. Cohen indicates that negotiations were finally

“USMX knows that our jobs are extremely dangerous, they know that our members work marathon hours in extreme heat and frigid cold to produce for the companies,” said Harold J. Daggett, ILA President. “We were presented with an unexpected battle but we are not alone in this effort to produce a fair contract for our ILA membership.”

By Justin stotzfus

Longshoreman Strike

SHIPPERS InSIdER 8 LOGISTICS rEPOrT

By Kristi WaterWorth

Page 9: Shippers Insider Nov - Dec 2012

“Any unexpected delays or disruptions in the supply chain can result in high costs for everyone involved,” the Toy Industry Association stated in a letter to the ILA and USMX. “Expenses are magnified when delays occur during peak shipping seasons — like in October, when retailers are stocking up for the holiday shopping season.”

Even though future negotiations have so far saved the pre-Holiday stocking season, retailers remain adamant that some kind of arrangement must be reached between ILA and USMX sooner rather than later. The risk of further damage to the supply chain and economy still loom heavy.

“This is a significant step forward, and signals that both sides — labor and management — are serious about reaching a deal,” said Jonathan Gold, Vice President for supply chain and customs policy at the National Retail Federation. “This extension should provide for a stable holiday shipping and shopping season over the next few months. Until a final contract is ratified, America’s retail community will remain concerned. NRF continues to urge both sides to negotiate in good faith to reach a firm and final deal for the good of the supply chain, and the good of the U.S. economy.”

Economic REpERcussions

There is no way to know for certain at this time what economic repercussions will result from this serious scare to retailers and shippers alike,

EffEcts to REtailERs

As negotiations stalled and the September 30 deadline crept ever closer, retailers began making alternative arrangements for their cargo while pleading with the ILA and USMX to come to an agreement that would prevent a work stoppage during the busy peak shipping season. Initially, retailers anticipated most of their shipping to redirect to West Coast ports, but were soon hit with the news that several major container ship lines would be adding massive surcharges to help mitigate the transportation cost.

Maersk, Cosco, NYK Line and Hanjin were among the first to provide this notice, in the event that the Eastern ports closed. Added charges of $800 per 20-foot container, $1,000 per standard 40-footer, $1,125 per 40-foot high cube and $1,266 per 45-foot cube were the most frequently projected figures. Despite the increases in pricing, shippers warned that West Coast capacity would be scarce and delays extremely likely.

“Our utilization into West Coast ports is already in the mid to high 90s so there is almost no capacity left,” explained Thomas Knudsen, Maersk Line’s Asia Pacific CEO. “We can take a little more, but not a major overflow.”

Retailers were concerned that the anticipated disruptions in the supply chain would lead to increased costs for consumers. Groups representing a diverse range of retailers, including The American Apparel and Footwear Association, the Travel Goods Association, Gemini Shippers Association and the Fashion Accessories Shippers Association urged the ILA and USMX to consider the consequences of a strike during the peak shipping season.

but shipper and customer confidence may be affected. Retailers already changed their purchasing and shipping patterns in hopes of stocking their shelves before the pending September 30 deadline. They began bringing in products early, using more air freight and West Coast ports.

“They have deadlines and need to make sure they have goods on store shelves,” Gold said of retailers preparing for holiday sales, now starting as early as October. But the contingency plans “all come at significant costs.”

Joe Curto, President of the New York Shipping Association and a member of the Maritime Alliance national negotiating team, has warned that any cargo volume diverted to other ports or shipped using alternate modes of transport may be lost permanently, causing significant and unintended shifts in the shipping industry. Although this sounds foreboding, trucking, air and rail service providers may be poised to benefit from the fall-out.

“A strike could actually be a positive for transportation providers (assuming demand destruction does not occur) as it would increase demand for faster modes of transportation (airfreight and trucking) as well as provide for a longer rail length of haul on East Coast intermodal moves,” explained Deutsche Bank analyst Justin Yagerman. “We believe the rails and intermodal service providers could

also benefit from a strike as they may realize longer length of hauls and are better prepared to quickly adjust their networks to changing business conditions than in the past.”

LOGISTICS REPORT SHIPPERS InSIdER 9

Page 10: Shippers Insider Nov - Dec 2012

in a long-term loss of revenue for farmers. Japanese confectioners, for example, turned to Turkey and other countries when California raisins and nuts were unavailable. American agriculture felt the impact for years.

“The fact that the U.S. agricultural producer was not at fault, that it was a labor dispute, doesn’t always convince the foreign customer to return to us,” AgTC stated. “So, once a port shuts down, the economic injury to the U.S. producer lingers long after the ports get back to work.”

tEmpoRaRy REspitE and long-tERm solution

Although the December 29 deadline is a temporary respite for shippers and producers worried about the peak sales and harvest seasons, there’s plenty of reason to believe that further delays in negotiations or additional threats to strike by members of the ILA could injure both exporters and importers. Reduced

shipping tonnage due to of lack of capacity and skyrocketing costs at the remaining ports could slow the retail and agricultural sectors. In a world where a shaky economy is just starting to struggle back to its feet, this level of labor dispute is risky at best and irresponsible at worst. Increased automation at the port level may well save injuries to workers who are concerned for their safety, but whatever agreement is reached, putting more people out of work when unemployment is high is the wrong move. Business and labor must be prepared to work together to limit the effect this prolonged negotiation may have on the global economy.

agricultural delays

Although retail organizations have been very vocal about the potential for disaster to Holiday sales, another segment of industry uses up significant shipping volume through the fall and winter: Agriculture. Domestic sales would have been unaffected by a strike, but American farmers supply agricultural products to buyers across the globe. These products have painfully thin margins, and farmers are often economically conservative. The looming fear of shipping surcharges may compound an already stressful year for farmers who have weathered major drought conditions throughout much of the country.

The Agricultural Transportation Coalition (AgTC) notes that the threat of shutdown was “already causing agriculture producers to slow production if they can, to hold back on export commitments. So the economic injury has already begun.”

Unlike manufacturers who can increase production in the short-term, when farmers slow production, it may take an entire season to recuperate commodity volumes. The world market is sensitive to even the slightest changes in supply. The last major United States port shutdown, on the West Coast in 2002, resulted

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Page 11: Shippers Insider Nov - Dec 2012

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Page 12: Shippers Insider Nov - Dec 2012

By Kristi WaterWorth

SHIPPERS InSIdER 12 LOGISTICS rEPOrT

the approximately 1,000 domestic logistics companies whose track records are filled with customer complaints concerning lost and delayed packages. With any luck, the competition from these world-class shippers will increase the overall efficiency of Chinese delivery companies.

Along with providing a substantial upgrade in service for domestic residential consumers, this move will allow FedEx and UPS to integrate their international shipping with their domestic routes, maintaining more control over packages and service quality to those cities where they are licensed. Both UPS and FedEx are expecting to expand further into China, with their initial entry only a sign of bigger things to come. Fully integrating domestic and international shipping throughout China will eventually allow Chinese manufacturers to choose to contract with either company for all of their shipping needs, creating more efficient import/export conditions.

China’s peak shipping season is during the Spring Festival, but the lack of services has caused delays during this high volume season in the past. With the addition of FedEx and UPS, companies both accustomed to

China has opened up its domestic express shipping to international competition by allowing FedEx and UPS to provide parcel delivery to homes in selected Chinese cities. Both companies have been active in China for years as importers and exporters, but this is the first time they have been granted access to the potentially enormous domestic market.

FedEx received permission to service eight Chinese cities: Shanghai, Guangzhou, Shenzhen, Hangzhou, Tianjin, Dalian, Zhengzhou and Chengdu. UPS will be operating in only five: Shanghai, Guangzhou, Shenzhen, Tianjin and Xi’an. This arrangement puts FedEx and UPS in direct competition with one another, as well as the state-controlled China Postal Express and Logistics, which controls about 30 percent of the market.

Although the parcel-distribution market appears tight, FedEx forecasts a 516 percent growth in the country’s currently $5.1 billion domestic delivery industry by 2020 to around $26.3 billion. FedEx and UPS enter the market with reputations for reliable, on-time delivery, giving them a huge advantage over

handling a massive volume influx during the Western winter holiday season, Spring Festival shoppers should have a better overall shipping and shopping experience. FedEx and UPS already has a system in place to handle the Christmas shopping season in the US and across Europe, their expertise in handling shipping peaks could pay dividends to their integrated domestic and international shipping systems.

Even if the presence of FedEx and UPS fails to spur the fragmented Chinese parcel market into providing better service, these two companies are slowly opening the door to Western logistics companies with strong track records. Positive experiences with these companies may lead to wider acceptance of other delivery companies, as well as a wider opening for Western business in general. This new Chinese market will help tighten up the slow-down FedEx and UPS have been experiencing in their other markets.

According to Reuters, DHL will consider a return to China once “the industry matures through consolidation and customers start to place more emphasis on quality services.”

FedEx, UPS to Lift China’s Domestic Market

Page 13: Shippers Insider Nov - Dec 2012

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SHIPPERS InSIdER 14 LOGISTICS rEPOrT

customers are “managing inventories carefully as they enter the traditional holiday selling season.”

Although this pattern breaks with tradition, Norfolk, Virginia-based shipper Norfolk Southern’s Chief Marketing Officer Donald Seale explained that pre-holiday shipping is now beginning in the summer, since prices tend to be lower. Instead of causing a peak in demand, retailers and manufacturers may be planning their shipments more carefully to save on transportation costs. The added convergence of harvested grains will certainly increase rail volumes, but a shipping peak may be overly optimistic in his opinion. Seale stated that “we expect volume growth with both share shifts and seasonal retail demand, but not in the sense of what we used to see in traditional peak season.”

Despite heading into peak shipping season, intermodal numbers continue to indicate uncertainty in the supply chain. While shipments were up 3.1 percent year over year in the week ending September 8, data from the Association of American Railroads indicates a 13.9 percent drop from the previous week. Carload traffic was equally disappointing with a 2.3 percent drop year over year and a 7 percent fall from the week prior. American railroads initiated 272,301 carloads and 214,517 intermodal trailers during this time frame.

Although carload numbers overall have been slipping steadily, down 2.4 percent over the first 36 weeks of 2012 when compared to the same time frame in 2011, trailers and containers overall are up 3.7 percent for the period. The Eastern railroads saw a 4 percent dip in weekly carload volume year over year, the West saw a 1.2 percent drop.

Despite these traffic drops, 11 of the 20 commodities measured by the AAR have seen carload increases year over year. The top three increasers were petroleum products, up 64.2 percent, farm products excluding grain at 61.4 percent and crushed stone, sand and gravel up

15.2 percent. Along with coal’s 9.1 percent decrease, waste and nonferrous scrap were down 15.1 percent, metallic cores down 16.7 percent and iron and steel scrap down 21.8 percent.

Experts point to the summer’s droughts for causing major consumer confidence drops in August, which may be causing retailers and manufacturers alike to delay orders until they have solid proof that spending will increase as the holidays approach. Traditionally, rail volumes begin to peak in the last two weeks of August as both retail and manufacturing gear up for the holiday shopping season and crops are harvested and moved to storage facilities. This year, Union Pacific Corp., the largest U.S. railroad, predicts a substantially muted shipping peak of no more than 5 to 8 percent, though others disagree.

Many industry experts believe 2012 will be a year without a seasonal peak. Donald Broughton, a St. Louis-based analyst describes any projected peaks to be “more hope than it is optimism.” Burlington Northern Santa Fe’s Chief Marketing Officer John Lanigan agrees, stating, “We do not anticipate a strong peak season this year.” He continued, writing that

u.s. intermodal Volume Rises, carload Traffic Falls By Kristi WaterWorth

Page 15: Shippers Insider Nov - Dec 2012

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**Day of pickup - is the day we pick up your shipment. The transit times are our typical transit times, excluding Saturdays, Sundays, and Holidays.

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ATLANTA

MIAMI

SACRAMENTORENO

SALT LAKE CITY

DENVER

EL PASO

MONTGOMERY

MODESTO

LAS VEGAS

PHOENIX

CHARLOTTE

PHILADELPHIA

Distribution ManagementInbound ServicesStorage & DistributionOutbound ServicesValue Added Services

Distribution ManagementFreight ForwardingMultimodal TransportationConsolidation and DistributionCustoms Clearance

Design & Planning

Supply Chain Management

Supply Chain Engineering

Order ManagementMaterial ManagementBusiness SupportGlobal Compliance

Order Management SystemsTransportation Mgmt SystemsWarehouse Mgmt SystemsHardware IntegrationSoftware Integration

YearsYears

Page 17: Shippers Insider Nov - Dec 2012

Transportation Management SystemCarrier Selection and NegotiationCarrier ManagementTraffic ManagementOcean and Air Freight ManagementFreight Bill Audit & Payment

Local, Regional, and National ServicePool Consolidation/DistributionBulk & Volume Freight ShippingJIT (Just-In-Time) Deliveries

Over-the-RoadSingle & Sleeper TeamsTruckload BrokerageSpecialty Equipment

Ocean ContainerIntermodal ContainerLand Bridge ServicesContainer Storage

Coast-to-CoastContract with All Major RailroadsAccess to Large Stacktrain Network

Call us for a quote

Day of pickup - is the day we pick up your shipment. The transit times are our typical transit times, excluding Saturdays, Sundays, and Holidays. Daylight standard long haul transit times are consistently the industry’s fastest overall.

ALASKA

HAWAII

PUERTO RICO

1-2 days

Mon/Tue Wednesday

Mon/Tue Wednesday

Monday Wednesday

Tue/Wed

Mon/Tue

Wednesday

Wednesday

Tuesday

Mon/Tue

Fri/MonThursday

Friday

Mon/Tue

Fri/Mon

Thur/Fri

Tue/Wed

Wed/Thur

1-3 Days1-2 Days 3-6 DaysPick-up

Day

Friday

Thursday

Wednesday

Monday

Tuesday

3-5 Days

3

4

4

4/5

4/5

Day

s

Tuesday

Tuesday

Mon/Tue

Fri/Mon

Thur/Fri

2-4 Days

2

3

3/4

3/4

3/4

Day

s

3

4

5

5/6

5/6

Day

s

1/2

3

3

3

3

Day

s

1/2

1/2

1/2

1/2

1/2

Day

s

**Day of pickup - is the day we pick up your shipment. The transit times are our typical transit times, excluding Saturdays, Sundays, and Holidays.

San Diego Los Angeles San Francisco

CALIFORNIA OVERNIGHT

TRANSIT TIMES

WASHINGTON

OREGON

CALIFORNIA

ARIZONA

NEW MEXICO

KANSAS

OKLAHOMA

TEXASLOUISIANA

MISSISSIPPI ALABAMA

ARKANSAS

MISSOURI

ILLINOIS

TENNESSEE

GEORGIA

COLORADO

UTAH

WYOMING

IDAHO

MONTANA

NEVADA

NORTH DAKOTA

SOUTH DAKOTA

NEBRASKA

IOWA

WISCONSIN

MICHIGAN

INDIANA

KENTUCKY

NORTH CAROLINA

FLORIDA

VIRGINIA

WESTVIRGINIA

OHIO

NEW YORK

VERMONT

MAINE

PENNSYLVANIA

SOUTH CAROLINA

MINNESOTA

WA

OR

CA

UT

AZ

NM

CO

ID

WY

MT ND

SD

NE

KS

TX LA

GAAL

TN

KY

INWV

NC

SC

VA

PA

NY

ME

NHVT

MACT

NJMD

DE

RI

AR

MS

FL

OK

IA

MN

WIMI

OH

IL

MO

NV

MASSACHUSETTS

NEW HAMPSHIRE

CONNECTICUTRHODE ISLAND

NEW JERSEY

DELAWAREMARYLAND

SAN FRANCISCO

SEATTLE

LOS ANGELES

SAN DIEGO

DALLAS

HOUSTON

MEMPHIS

CHICAGO

DAYTON

NEWARK

ATLANTA

MIAMI

SACRAMENTORENO

SALT LAKE CITY

DENVER

EL PASO

MONTGOMERY

MODESTO

LAS VEGAS

PHOENIX

CHARLOTTE

PHILADELPHIA

Distribution ManagementInbound ServicesStorage & DistributionOutbound ServicesValue Added Services

Distribution ManagementFreight ForwardingMultimodal TransportationConsolidation and DistributionCustoms Clearance

Design & Planning

Supply Chain Management

Supply Chain Engineering

Order ManagementMaterial ManagementBusiness SupportGlobal Compliance

Order Management SystemsTransportation Mgmt SystemsWarehouse Mgmt SystemsHardware IntegrationSoftware Integration

YearsYears

Page 18: Shippers Insider Nov - Dec 2012

SHIPPERS InSIdER 18 Charts

$3.60

$3.70

$3.80

$3.90

$4.00

$4.10

$4.20

9/26

10/2

6

11/2

6

12/2

6

1/26

2/26

3/26

4/26

5/26

6/26

7/26

8/26

Containerized auto parts imports into the U.S. grew substantially in the first half of 2012, expanding 18.5 percent to 183,318 20-foot-equivalent units, according to data from PIERS, a JOC sister company.

This followed a robust increase in the first quarter, when volumes rose nearly 15 percent versus the prior-year quarter. In fact, containerized auto imports have been on a roll, growing 33 percent, 23 percent, 21 percent and 20 percent in the four quarters of 2011, according to PIERS data. Japan was the largest source country for auto parts In the first half of 2012, accounting for 23.5 percent of total imports, a slight increase over its 2011 market share during the same period. China was the second largest source country in the first half, accounting for 21.1 percent of imports, down slightly from the 22.2 share it held in the first half of 2011.

South Korea and Germany accounted for 15 percent and 12.3 percent of imports in the first half

Source: PIERS

U.S. CONTAINERIzEd AUTO pARTS IMpORTS ON A ROLLThe Oct. 1 average U.S. diesel price dipped seven-tenths of a cent from the week before to $4.079 per gallon and was 33 cents or 8.8 percent above last year. The average per-gallon price has remained above $4 per gallon for the seventh consecutive week. The EIA forecasts an average of $3.96 per gallon in 2012 and $3.73 in 2013, following an average of $3.84 in 2011.

U.S. dIESEL pRICES

Source: U.S. Department of Energy, Energy Information Administration, “ weekly Retail On-Highway Diesel Prices,” www.eia.doe.gov

National & Regional Averages: Oct. 1, 2012

Trade daTa

Average U.S. price per gallon

$4.08

$4.08

$4.01

$4.00

$4.21

West Coast

Rocky Mountain

Gulf Coast

Midwest

East Coast

U.S.

$3.90 $4.00 $4.10 $4.20 $4.30 $4.40

$4.30

190

170

150

130

110

90

70

50

Th

ou

san

ds

of

TE

Us

Ye

ar-

Ov

er-

Ye

ar

Pe

rce

nta

ge

Ch

an

ge

60%

50%

40%

30%

20%

-30%

-40%

-50%

-20%

10%

-10%

0%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q12 2Q123Q11 4Q11

Year - Over - Year

Auto Parts

LOGISTICS

Trucking

Warehousing

Computer Services

Yard Storage

(562) 244 - 9617JakE Jacobson

900 S. Turnbull Cayon Rd., City of Industry, CA 91745

21151 Walter Strawn Dr.Elwood, IL 60421

Page 19: Shippers Insider Nov - Dec 2012

58 HOURS50

HOURS

50 HOURS

53 HOURS

39HOURS

30 HOURS

24HOURS

20HOURS

FREEQUOTE

2012 Nov. Dec. Jan 2013 Feb. Special (Call)IL $3,600 $3,600 $3,700 626-523-2854NJ $4,900 $4,900 $4,900 626-523-2854GA $3,800 $3,800 $3,900 626-523-2854TX $2,600 $2,600 $2,600 626-523-2854

Please contact us for a Free Quote now626-523-2854

Trade daTa

Page 20: Shippers Insider Nov - Dec 2012

SHIPPERS InSIdER 20 Charts

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

1/7/

2011

1/21

2/11

2/25

3/11

3/25 4/

84/

22 5/6

5/20 6/

36/

17 7/1

7/15

7/29

8/12

8/26 9/

99/

2310

/14

10/2

811

/11

11/2

512

/912

/23

1/6/

121/

202/

102/

24 3/9

3/23 4/

64/

20 5/4

5/18 6/

16/

156/

297/

137/

278/

108/

24 9/7

9/21

$2,500

$3,000

$3,500

$4,000

$4,500

1/7/

2011

1/28

2/25

3/18 4/

84/

295/

206/

10 7/1

7/22

8/12 9/

29/

2310

/21

11/1

112

/212

/23

1/13

2/10 3/

23/

234/

13 5/4

5/25

6/15 7/

67/

278/

17 9/7

$500

$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

1/7/

2011

1/28

2/25

3/18 4/

84/

295/

206/

10 7/1

7/22

8/12 9/

29/

2310

/21

11/1

112

/212

/23

1/13

2/10 3/

23/

234/

13 5/4

5/25

6/15 7/

67/

278/

17 9/7 $400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

1/7/

2011

1/28

2/25

3/18 4/

84/

295/

206/

10 7/1

7/22

8/12 9/

29/

2310

/21

11/1

112

/212

/23

1/13

2/10 3/

23/

234/

13 5/4

5/25

6/15 7/

67/

278/

17 9/7

800

1,000

1,200

1,400

1,600

1/7/

2011

1/28

2/25

3/18 4/

8

4/29

5/20

6/10 7/

1

7/22

8/12 9/

2

9/23

10/2

1

11/1

1

12/2

12/2

3

1/13

2/10 3/

2

3/23

4/13 5/

4

5/25

6/15 7/

6

7/27

8/17 9/

7

10/16/09 Base index $1,000

*Holiday weeks including buildup and return distort week-to-week data.Source: Association of American Railroads“Weekly Traffic of Major U.S. Railroads,” www.aar.org

Shanghai export average spot rates for the following four trade lanes are among the 15 component trade lanes in the weekly SCFI – Shanghai Containerized Freight Index produced by the Shanghai Shipping Exchange and weight 57.5 percent of the SCFI comprehensive reading.

Base ports defined: U.S. West Coast-Los Angeles/Long Beach/Oakland; U.S. East Coast- New York/ Savannah/Norfolk/Charleston; Europe- Hamburg/Antwero/Felixstown/Le Havre; Mediterranean Sea- Barcelona/ Valencia/Genoa/Naples; Persian Gulf and Red Sea-Dubai. The freight rate includes ocean freight and surcharges including BAF/FAF EBS/EBA CAF/YAS PSS WRS PCS SCS/SCF/PTF/PCC.SOURCE: The Journal of Commerce, www.joc.com, Shanghai Shipping Exchange, www1.chineseshipping.com.cn/en/indices/scfi.jsp

*2012: Index prior to Chinese New Year was Jan. 20, The index was not published on Jan. 27. *2011: Index prior to Chinese New Year was Jan. 28. The index was not published Feb. 4 or Oct. 7.

Intermodal Cargo

U.S. railroad intermodal traffic for week 37 of 2012, end-ing Sept. 15, increased 3.9 percent year-over-year. Year-to-date total intermodal traffic, at 8,693,030 units, was up 3.7 percent from the same period last year.

Trailer CargoRailroad trailer traffic for week 37, ending Sept. 15, declined 10.7 percent year-over-year, but jumped 16.6 percent from the week before. Year-to-date trailer traffic, at 1,093,240 units, was down 8.7 percent from the same period last year.

Carload CargoRailroad carload traffic for week 37, ending Sept. 15, slipped 2.9 percent year-over-year and was down 7.1 percent from the week before. Year-to date carload traf-fic, at 10,454,518 units, was down 2.4 percent from the same period last year.

SCFI- ShANGhAI CONTAINERIzEd FREIGhT INdEx U.S. RAIL CARGO

The Shanghai Container Freight Index comprehensive reading for Sept. 21 was 1,260.54, down 25.09 points or 2 percent from the week before. The index was 269.20 points or 27.2 percent higher than a year ago and 312.96 points or 33 percent higher than year-end.

To U.S. WEST COAST base ports*The Sept. 21 U.S. West Coast base port average spot rate was $2,727 per FEU, $16 or 0.6 percent more than the week before, and $1,035 or 61.2 percent higher than year-end.

To EUROPE base ports*The Sept. 21 Europe base port average spot rate was $1,172 per TEU, $46 or 3.8 percent below the week before. The spot rate was $418 or 55.4 percent higher than a year ago and $471 or 67.2 percent more than year-end.

To MEDITERRANEAN base ports* The Sept. 21 Mediterranean base port average spot rate was $1,220 per TEU, $29 or 2.3 percent less than the week before. The rate was $193 or 18.8 percent more than the same week last year and $506 or 70.9 percent higher than year-end.

To U.S. EAST COAST base ports* The Sept. 21 U.S. East Coast base port average spot rate was $3,732 per FEU, $234 or 5.9 percent less than the week before, but $840 or 29 percent higher than year-end.

10/16/09 Base Index

10/16/09 Base Index

10/16/09 Base Index

10/16/09 Base Index

$1,431

$1,232

$2,439

$1,279

Container CargoRailroad container traffic for week 37, ending Sept. 15, grew 6.3 percent year-over-year, and jumped 17.4 per-cent from the week before. Year-to-date 2012 container traffic, totaling 7,599,790 units, was up 5.8 percent from the same period last year.

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

3/17 4/17 5/17 6/17 7/17 8/17

Year-over-yearWeek-to-week

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

3/17

3/31

4/14

4/28

5/12

5/26 6/

9

6/23 7/

7

7/21 8/

4

8/18 9/

1

9/15

Year-over-year

Week-to-week

-20%

-10%

0%

10%

20%

3/17

3/24

3/31 4/

74/

144/

214/

28 5/5

5/12

5/19

5/26 6/

26/

96/

166/

236/

30 7/7

7/14

7/21

7/28 8/

48/

118/

188/

25 9/1

9/8

9/15

Year-over-yearWeek-to-week

Page 21: Shippers Insider Nov - Dec 2012

Intra-Asian trade and trucking is expected to show significant growth this year, according to a UPS survey of business leaders in small to mid-sized enterprises across Asia. Almost 70 percent of the 1200 executives surveyed anticipate trade inside Asia to outpace the robust trade between Asian nations and the West. This survey comes on the tail of the news of FedEx and UPS’s entry into the Chinese domestic parcel delivery business, further encouraging the idea that Asia as a whole is ready for a more global and modern delivery industry.

Ocean and air volumes in Asia have already experienced large growth, but the growth of trucking has been slower, due to both infrastructure limitations and barriers to cross-border trucking. Political barriers to trade are breaking down as intra-Asian trade increases. “Customs procedures have been getting better and thus less time is spent on border crossings now, speeding up total transit times,” said Essa Al-Saleh, president and CEO of Agility’s Global Integrated Logistics business group.

Agility has been providing cross-border trucking services across Asia since 2010, with maximum payloads of 20 tons per load. Customers overall have had a positive opinion of intra-Asian cross-border trucking, seeing it as a viable alternative to

air freight that realizes a 20 to 40 percent savings door-to-door. Al-Saleh added, “Time-wise we find that cross-border trucking is quicker than ocean freight, and door-to-door this provides an advantage despite the higher cost.”

Growing intra-Asian trade means more flexibility and faster transit times for delicate items like hi-tech and temperature sensitive cargo. More complete supply lines are allowing shipments to flow from their origination points to their destinations half way across the planet without interruption. Streamlining has made delicate operations like moving medical supplies to the most remote parts of Asia possible.

“We can truck from Singapore all the way through to China,” explained Brendan Canavan, president of UPS’s Asia Pacific Region. “Recently, we handled a healthcare shipment that carried flu vaccines in our PharmaPort 360 container from the U.S. to Laos, for humanitarian purposes. On the last leg of the journey we trucked the container between Bangkok and Vientiane. The product safely arrived at the final destination without any spoilage to the recipient, the Ministry of Health of Laos.”

Intra-Asia trucking is still hobbled by lack of infrastructure capable of supporting the

traffic required, however. Decentralizing of manufacturing by large companies has helped immensely, but will not be a permanent solution. Although both China and India have made huge investments in new roads, demand is so enormous that these motorways are quickly saturated with traffic. Continued investment by these countries will allow the growth of intra-Asian trucking to continue and eventually lead to savings for companies choosing to include trucks alongside rail, ocean and air in their supply chains.

“The biggest cost to companies is in their supply chains. We’ve seen a lot of focus by companies on improving manufacturing, but they lose margin in the supply chain.” said Dr. Martin Christopher, professor emeritus at Cranfield University’s school of manage- ment in Cranfield, U.K., and author of “Logistics and Supply Chain Management, ”The big issue for companies based in that part of the world is that they have to contend with significant infrastructure challenges. It’s a real inhibition to intra-Asian transportation.”

intra-asian shipping forecast

*Holiday weeks including buildup and return distort week-to-week data.Source: Association of American Railroads“Weekly Traffic of Major U.S. Railroads,” www.aar.org

LOGISTICS REPORT SHIPPERS InSIdER 21

By Kristi WaterWorth

Page 22: Shippers Insider Nov - Dec 2012

19914 S. Via Baron, Rancho Dominguez, CA 90220Tel: 310 - 747 - 7388 | Fax: 310 - 747 - 7377

www.portuscfs.com

PortUs proudly presents our cFS and General order Warehouse, Grand opening on:

OCTOBER 1st, 2012

Page 23: Shippers Insider Nov - Dec 2012

PortUS CFS is a new 235,000 sq. ft. CFS facility located 6 miles from the Port of Los Angeles/Long Beach. We provide a wide variety of services.

• CFS Firms Code - W301• General Order (G.O.) Firms Code - W296• Inland (I.P.I.) via Rail & Truck• Transloads• Distribution• Project/Specialized Cargo• Export• Storage

Our experienced & professional team is available to accommodate all of your shipping needs. Please contact us for personalized rates and services.

Page 24: Shippers Insider Nov - Dec 2012

china’s changing Economy slowing Export growthThe Chinese government is projecting their economy to grow at a relatively sluggish rate of 7.5 percent this year, their smallest increase since 1990. Although the People’s Bank of China insists that their economy is slowing due to structural change, other countries are watching the situation closely. Anecdotal evidence indicates that China’s economy may be in worse shape than official reports admit. Shell reported that the Chinese demand for diesel and other products was at recession-like levels.

Economists outside of China are divided in their interpretation of recent economic figures and China’s response to them. Some believe China is, in fact, experiencing structural changes, with government infrastructure spending slowing and manufacture of the most labor-intensive goods being relocated to lower-wage countries like Vietnam. China continues to grow technology manufacturing, however, showing increases in exports of electronics and solar panels. The Wall Street Journal predicts larger exports of Chinese automobiles, spare parts, biotechnology and chemical products in the near future.

Economists are examining the real possibility that the slow global economy has finally caught up to China. Chances were never great that China would be able to weather the same global disaster that has slowed trade significantly, but

the ultimate impact of such a financial giant experiencing a significant economic down-turn is largely unknown. In an interview with National Public Radio, Beijing-based economist Patrick Chovanec explains what a shift in the global trade balance with China could mean to the United States:

“The United States is probably in a pretty good position if there’s a slowdown. And in fact, part of the slowdown that’s taking place is really that the Chinese economy needs to shift from a dependence on exports and investment to drive growth, to domestic consumption to drive growth. And unfortunately, that’s not - it’s not a smooth shift, it’s a very bumpy economic adjustment,” Chovanec explained. “But ultimately, if the slowdown is part of that kind of economic rebalancing, it will be good for the American economy because the United States would like to see China import more food from American farmers. They would like the markets to be open to services that American companies can provide. So that’s part of, it’s one piece of the rebalancing that really, in some ways, would benefit the Chinese economy as much as it would benefit the American economy.”

Since the interview with Chovanec on September 4, China’s top economic planner has approved 157.7 billion dollars (1 trillion yen) for 55

highway, port and railway projects to help stabilize the country’s economy and ease it into a “soft landing,” according to the International Monetary Fund’s Deputy Managing Director, Zhu Min. Economists’ responses to these newly-announced projects have been hopeful, though slow growth continues to be the prediction for the next three to four years.

Fast-tracked Chinese infrastructure investment, coupled with interest rate reductions, tax reductions for small businesses, and the entrance of private companies into previously closed sectors has given rise to hope that the end of China’s slow down is near. Former advisor to China’s central bank, Li Daokui, sees the bottom quickly approaching in the third quarter, with new momentum building in the first or second quarters of 2013.

By Kristi WaterWorth

SHIPPERS InSIdER 24 LOGISTICS rEPOrT

Page 25: Shippers Insider Nov - Dec 2012

Your Requirements... Our Solutions...

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Page 26: Shippers Insider Nov - Dec 2012

TOp 10 FOR-hIRE CARRIERS TOp 10 OCEAN CARRIERS

Page 27: Shippers Insider Nov - Dec 2012

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Page 28: Shippers Insider Nov - Dec 2012

Service Center Team

Have you figured out the puzzle to be the ultimate Repair Solution for any consumer electronic product? Service Center Team has!

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Call (916)825-7140 or visit our website at www.servicecenterteam.com for more details218 Machlin Ct., Walnut, CA 91789

PROBLEM SOLVED.NOW MORE LOCATIONS TO SERVE YOUUsing one of our many repair depots we can repair your electronic products quickly and efficiently. Small products can be shipped to our repair depots using overnight services and larger appliances can be picked up using our fleet of trucks, repaired and returned within one week.

Page 29: Shippers Insider Nov - Dec 2012

Service Center Team

Have you figured out the puzzle to be the ultimate Repair Solution for any consumer electronic product? Service Center Team has!

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Call (916)825-7140 or visit our website at www.servicecenterteam.com for more details218 Machlin Ct., Walnut, CA 91789

PROBLEM SOLVED.NOW MORE LOCATIONS TO SERVE YOUUsing one of our many repair depots we can repair your electronic products quickly and efficiently. Small products can be shipped to our repair depots using overnight services and larger appliances can be picked up using our fleet of trucks, repaired and returned within one week.

Page 30: Shippers Insider Nov - Dec 2012

Alan Yang | 626.539.7674

We have a large network of carriers to move vehicles quickly and efficiently.

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Page 31: Shippers Insider Nov - Dec 2012

Alan Yang | 626.539.7674

We have a large network of carriers to move vehicles quickly and efficiently.

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Expert Blocking and BracingMarine Insurance Coverage Available

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Page 32: Shippers Insider Nov - Dec 2012

LEASE & SALEPROPERTIES FOR

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It offers a range of services within four primary disciplines:1. Transaction Services, including tenant and landlord representation in office, industrial and retail real estate;2. Capital Markets, including property sales, investment management, valuation services, investment banking, debt and equity financing; 3. Client Solutions, including integrated real estate strategies for large corporations and property owners, and4. Consulting Services, including business and real estate consulting.

Warehouses, land, business center investments, loans and development.

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Page 33: Shippers Insider Nov - Dec 2012

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Headquarter218 Machlin Ct., Walnut, CA 91789

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900 Turnbull Canyon Rd., City of Industry, CA 91745

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Page 34: Shippers Insider Nov - Dec 2012

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since 1932

Corporate Headquarters:10005 Mission Mill RoadWhittier, CA 90601Phone: 562/948-4242Fax: 562/695-5299

Regional O�ce:270 Conejo Ridge Avenue, Suite 210Thousand Oaks, CA 91361Phone: 805/495-9553Fax: 805/379-2718

www.oltmans.com

Please contact James Wu for more information562/948-4242 x3430

Page 35: Shippers Insider Nov - Dec 2012

“ Your Local Regional National LTL & Truckload

Service Provider.”

SB Freight

National LTL | Truckload | Drayage | Warehousing

SB Freight is a premier CA LTL carrier with facilities in San Diego, Los Angeles, and San Francisco.

We o�er California LTL coverage at very competitive rates. Our helpful customer service team will be glad to assist with any special requests or needs you might have. SB Freight o�ers out-of-state shipments direct delivery service for Southwest / Midwest / Southeast and Northeast regions using OTR linehaul drivers that deliver directly to our delivery agents in the destination area. This arrangement bypasses most breakbulks process with and results in timely, accurate, and exceptionally reliable service. Please give us a call at 800-858-9889 and one of our knowl-edgeable and helpful represenatives will be happy to help with your next shipment.

YearsYears

San Diego Los Angeles San Francisco

OVERNIGHT SERVICES

Page 36: Shippers Insider Nov - Dec 2012

19914 S. Via Baron, Rancho Dominguez, CA 90220Tel: 310 - 747 - 7388 | Fax: 310 - 747 - 7377

www.portuscfs.com

PortUS CFS is a new 235,000 sq. ft. CFS facility located 6 miles from the Port of Los Angeles/Long Beach. We provide a wide variety of services.

• CFS Firms Code - W301• General Order (G.O.) Firms Code - W296• Inland (I.P.I.) via Rail & Truck• Transloads• Distribution• Project/Specialized Cargo• Export• Storage

Our experienced & professional team is available to accommodate all of your shipping needs. Please contact us for personalized rates and services.