If you have not registered for the Annual Conference June 19-21, please make plans to do so. This is a tremendous value thanks to our generous event sponsors as follows:

ABF, Fred Piercy
Averitt Express, Mark French
Belue Trucking, Danny McCallister
Cargo Logistics, Ken Wall
Epes Transport, Alan Oakley
Express-1, Dennis McCaffrey and Colleen Connor
Fort Transfer, Brad Kahler
JB Hunt, Syd Cuningham
Mediterranean Shipping, Paul Hargett
NC Ports Authority, Tom Guthrie
Old Dominion Freight Line, Cecil Overbey
Roadway Express, Bob Stone
SC Ports Authority, Sheila Cox
Virginia Ports Authority, Martie Schlosser and Debbie Dowdle
Wynne Transport, Hank Albrecht

Thanks to all our sponsors!!!

Please remember that the deadline for early registration is May 25 and the $50 savings. The registration is also available on line. Correction: there was an error on the golf form. The golf fee should be $90 instead of $85. The error was made because we are playing the Jones course at Sea Trail this year, our error. We must have 100 golfers to play so please send in golf forms. Please do help us get the word out for the conference by letting us know if you have non-members that may want to attend this year. We will get the forms out for you; just let us know the email address of the contact. The forms are different from previous years so please read carefully. Many have asked about bringing children to the banquet and the cost. Children are welcome at the banquet. A special child’s plate for 12 years and younger is available for $15, so please note that on your registration or notify the League office. Display Tables: If you would like to reserve a display table, please let us know. The cost is $50. Display tables are free for all event sponsors. Annual Board Meeting: if you have a request or an issue that you want the Board of Governors to consider, please forward that request to the League office in advance so that the Board can review it.

SLUGGISH GDP FOR FIRST QUARTER

The Journal of Commerce has reported that the US economy grew at an annual rate of 0.6 percent in the first quarter, indicating that we are in a serious slowdown but not in a recession. The advance estimate of the increase in Gross Domestic Product matched the slow rate of fourth quarter 2007, according to the Bureau of Economic Analysis. Personal spending was up, as well as exports of goods and services and the federal government spending. Residential fixed investment and personal spending for durable goods declined. Sales of computers were a big part of personal spending but added less to the whole than in the prior quarter. Motor vehicle output subtracted three-tenths of a percent from first quarter growth after taking eight-tents of a point off the fourth-quarter growth.

FUEL CAUSING STRESS ON OCEAN SHIPPING

Excerpts from the World Shipping Council. Shipping lines worldwide are hurting as crude oil prices topped $119 per barrel, pushing marine bunker fuel prices up past $552 per ton, representing a $26 per ton increase since the end of March alone. Bunker prices have risen 87% since the beginning of 2007. Fuel costs represent as much as 60% of total ship operating costs! Ocean carriers are required to recover these costs to maintain levels of service, which means that the price of shipping goods will continue to go up. Eye opening example of the effect or rising fuel costs: A large container vessel used in the Trans-Pacific trade with an actual, maximum capacity of 7,750 20 foot TEUs (or 3,875 40-foot TEUs). With the cost of bunker fuel at $552 per ton, with fuel consumption of 217 tons per day, and a 14 day voyage, a single round trip for this one vessel would produce a fuel bill of $3,353,952, and it could possible be even more! Recovery of fuel cost from customers is a challenge. If a cargo ship pays less than its share of the fuel cost that means that other shippers must pay more. Approximately 1,500 ocean-going vessels, mostly containerships, make more than 26,000 US port calls each year, providing American importers with service to and from approximately 175 countries. The annual cost of fuel is tens of billions of dollars. Transporting goods via ocean container can be 17 times more efficient than transporting the goods by air and 10 times more efficient than transporting goods by highway.

3PL MARKET AND FINANCIAL RESULTS RELEASED

US third-party logistics services provider revenues grew $122 billion. Growth was 7.4% in gross revenue and 7.2% net revenue. World revenues grew to $487 billion driven by Asian results. Overall growth continued a pattern of being more than three times the growth in US gross domestic product. Armstrong & Associates projects that US 3PL growth will exceed $150 billion in 2010 after a modest 5.5% increase in 2008 and a 7.5% increase in 2009. International transportation management including Expeditors, Kuehne & Nagel and DHL Global Forwarding grew by 9.5%. Domestic transportation grew 8% with net income margins averaging 13.4%.

TWIC ENROLLMENT

A total of 319.739 port and maritime workers have signed up for the Transportation Worker Identification Credential or TWIC, through April 23, according to figures furnished by the Transportation Security Administration. A total of 171,692 biometric identification cards have been printed through April 24, and 72,056 cards have been activated.

US INDUSTRIAL PRODUCTION RISESUS 

Industrial production rose 0.3% in March, the Federal Reserve reported. The increase in production at factories, mines and utilities followed a revised 0.7% decrease in February that was greater than 0.5% drop reported originally. The March downturn was higher than economists’ forecasts of a 0.1% decline. Manufacturing, which accounts for about four-fifths of industrial production, gained 0.1% after falling 0.5% in February. Excluding automobiles, factory output rose 0.4%.

TARIFF IMPOSED ON SOCKS IMPORTED FROM HONDURAS

The Bush Administration has imposed a six-month tariff on socks imported from Honduras in an effort to give domestic manufacturers temporary relief from a surge of imports following passage of the Central American Free Trade Agreement. The administration said that the 5 percent tariff would take effect on July 1 and would last until the end of the year. Honduras is the second-largest foreign supplier of cotton socks to the US after Pakistan and ahead of China.
SHANGHAI INDEX SOARSThe Shanghai Composite Index surged as much as 9.6% in the biggest one-day rally since October 23, 2001 as reported on April 24. The gain came after the government cut a tax on stock transactions in an effort to boost slumping markets. The rebound came as many global markets are recovering modestly from turmoil linked to the US credit crisis and slower global growth.

DURABLE GOODS ORDERS FALL AGAIN

Orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession. The Commerce Department reported that demand for durable goods dropped by 0.3% last month. The last time orders fell for three consecutive months was from February to April 2001, when the country was sliding into the last recession. President Bush said that the economy was not in a recession but in a period of slower growth. The Labor Department reported that claims for unemployment benefits fell by 33,000 to 342,000, a better than expected prediction from economists. The unemployment rate climbed to 5.1% in March as businesses laid off the largest number of workers in five years. The weakness in orders was led by a 4.6% drop in orders for autos. The 0.3% drop in orders for durable goods, items expected to last at least three years, followed even bigger declines of 0.9 percent in February and 4.4% in January. Orders for all transportation products fell by 4.6%. Orders for commercial aircraft rose by 5.5% while demand for defense aircraft surged by 29.4%.

FRENCH PORT STRIKE

France’s largest port, Marseille ground to a halt on April 23 as walkouts by port workers angry at privatization plans sparked disruption across the country. Cargo traffic was paralyzed in the Mediterranean although passenger ferries were allowed to move in and out freely, as 1,000 crane drivers, signals operators and dock workers formed a picket line on site. Some striking workers wrote “the Port is not for sale” on a bridge. Protestors also blocked access to the Atlantic cargo terminals at Bordeaux, La Rochelle and Saint-Nazaire, and Le Havre and Rouen on the Channel, unions and port management said. All maintenance work was halted at La Havre’s container terminals, though fuel tanker maintenance and car-ferry links to Britain were unaffected. Maintenance terminals were also shut down in Bordeaux. The CGT union call the 24-hour strike in protest to privatize some heavy machinery operations in line with dock workers whose jobs went private in the 1990s. Transport Minister Dominique Bussereau defended the reform plans on French radio, saying they aimed to revitalize France’s harbors and in the long term would create 30,000 new jobs. The port reform bill, part two of a process started in 1992, is to go before the French parliament in May.

BRAZILIAN CUSTOMS STILL ON STRIKE

The Brazilian Customs Officials are still on strike for salary and social security issues, causing delays on import and import shipments from and to Brazil. 70% of Customs activities are stopped. Although Customs officials are negotiating with the Brazilian government, no agreement has been reached.

MAERSK WINS "BEST GLOBAL SHIPPING LINE” 

Maersk Line was awarded “Best Global Shipping Line” for the 15th straight year at the 22nd Asian Freight and Supply Chain Awards ceremony held last week in Singapore. The company also was the winner of the “Best Shipping Line-Asia-Europe” for the 21st consecutive year. The Maersk Line fleet consists of more than 500 container vessels with a capacity of more than 1.7 million TEUs. Judging criteria for the two awards included schedule reliability, efficient customer service, service network comprehensiveness, competitive pricing, and information technology.

US SOUTHEAST URGED TO DEVELOP INLAND HUBS

Port, trade and maritime officials that met in Charleston for the 2008 Port Productivity Conference are encouraged to develop inland hubs. Jim Newsome, VP Hapag Lloyd, said that one area where the supply chain can be improved is the inland side. Carl Warren, director of business development for CSX Intermodal, said nowhere will meeting those challenges be more important than the Southeast. Recent and future planned port expansions in Charleston, Savannah and Jacksonville will require an even greater need for distribution hubs, Warren said.

NC HIGHWAY TRUST FUND COMMENTS

All candidates for NC Governor had comments concerning the often abused NC Highway Trust Fund. “We must end the automatic transfer of $172 million from the Higway Trust Fund”, Bill Graham. “The raid of the Highway Trust Fund have destroyed our transportation infrastucture”, Pat McCrory. But will it end?

IMPORTS THROUGH CALIFORNIA PORTS DECLINE AGAIN

Containerized imports through California ports declined again in March. Imports through Los Angeles dropped 7.1 percent compared to March 2007. Long Beach reported a 9.8 percent decline and imports through Oakland dropped 12.2 percent. With the economy struggling and the housing crisis deepening, containerized imports are projected to remain weak through the summer months. The LA-Long Beach port complex handles more than 40 percent of US imports. Exports out of the US continue to boom thanks to a weak dollar and relatively strong economies in Europe and Asia. Exports through Los Angeles increased 21.1 percent in March from a year ago. Exports increased 29.76 percent in Long Beach and 6.4 percent in Oakland.

HORIZON CHIEF OUTLINES NEW PLANS

Horizon Lines Chairman, President and CEO Charles Raymond has outlined a road map for developing a US Marine Highway that will ease congestion around gateway corridors and improve the overall efficiency of America’s transportation system. Mr. Raymond told attendees at North America’s Highways Conference in Virginia Beach hosted by the US Maritime Administration, that Horizon Lines is working with maritime unions to design a viable model for Coastwise Container Feeder Network. The feeder service will act as a safety valve, moving containers from congested gateways to smaller ports closer to their destination with better intermodal connections. “Gateway ports with deep water will serve the large containerships and the primary metropolitan consumer markets,” said Mr. Raymond. “Regional ports will provide the intermodal safety valve served by a network of smaller container vessels and ro/ro ships, offering fast connections and efficient service to local markets. Inland ports will develop efficient highway alternatives, supporting barge and ferry networks.” Mr. Raymond called for a national port plan that would prioritize federal funding of port projects, such as dredging and inland infrastructure construction, according to a port’s role in global supply chains

STRICTER MILEAGE STANDARD PROPOSED BY BUSH ADMINISTRATION

The next generation of cars and trucks will need to average 31.6 miles per gallon by 2015 as proposed by the Bush administration. The proposal is in response to a new energy law that requires new cars and trucks to collectively average 35 mpg by 2020. The rules are designed to push companies to boost fuel efficiency across the entire lineup. Manufacturers will have different requirements for cars and trucks of different sizes based on vehicle sales. The plan is expected to save nearly 55 billion gallons of oil and reduce carbon dioxide emissions by 521 metric tons over the life of the new vehicles built between 2011 and 2015. It will add an average cost of $650 per passenger car and $979 per truck in 2015. The changes would require the industry to implement more than half of the fuel-efficiency requirements by 2015 and push them to build more gas-electric hybrid cars and diesel-powered trucks and SUVs. In keeping with the law, automakers will continue to receive a 1.2 mpg credit for producing flexible-fuel vehicles, which run on ethanol blends, but the credit will begin phasing out in 2014. Environmental groups have called it a loophole, nothing that few vehicles actually use E85 ethanol. Amen.

IMPORTANT MEETINGS

“The Secrets of Successful Trade Financing”, Charlotte, May 19. Sponsored in part by SunTrust, UPS, District Export Council and The American Export Training Inst. For information: www.exportrisk.com

SMC3 CONTRACT LAW SEMINAR

May 21, Hilton Atlanta Airport, For information: www.smc3.com/go/Contractlaw/br

GAS PRICES AROUND THE WORLD

Italy, $6.48 per gallon; UK $5.79; Spain $4.74; Brazil $3.12; Japan, $4.24; Saudi Arabia $0.91; Egypt $0.65; Venezuela $0.12