by Rosie Courtney, Port of Seattle
The Port of Seattle is pleased to host this year's annual convention of the International Refrigerated Transportation Association. We are eager to welcome all conference attendees back to the beautiful Pacific Northwest. We look forward to meeting you at the evening reception at the Port's new World Trade Center overlooking Elliott Bay.
On Tuesday, June 15, we hope to see you at afternoon tours of the Port's Terminal 90-91 Complex and the CITYICE cold storage facility.
For nearly ninety years, moving cargo has been the Port's primary focus. But today, Seattle is much more than a crossroads of international transportation, trade and commerce. Seattle is the source of trade solutions that give customers a competitive edge in the global marketplace.
As one of the world's most vibrant ports, Seattle features the infrastructure, services and deep-water harbor critical to success in the shipping industry. Our strong relationships with business, labor and government expedite cargo movements.
When it comes to refrigerated cargo, Seattle consistently ranks at the top in handling imports and exports. Seattle's immense capacity for reefer containers combined with one of the largest on-dock chill warehouse facilities on the West Coast, allows us to handle containerized or breakbulk cargo efficiently.
Also, Seattle now offers customers an additional "safety net" service with its cold treatment facility-the only U.S.D.A. certified cold treatment facility for perishable imports on the West Coast.
Discover the Jewel of the Pacific Northwest
While in Seattle, we hope you can experience some of what makes this region one of the most coveted locales today. Whether it's a vibrant sunset, majestic mountains or simply the spectacular vistas of the Puget Sound, the Pacific Northwest is polished to perfection.
Consider starting your Seattle adventure with a steaming latte from a colorful corner espresso stand. Then stroll the scenic waterfront or hop a ferry to explore the quaint island communities nearby.
Recreation enthusiasts will enjoy biking through the San Juan Islands, kayaking on lakes or hiking mountain meadows. Seattle also offers prime boating and fishing.
Those interested in more metropolitan discoveries will find upscale shopping at Nordstrom's new flagship store, the Space Needle, a game with one of the city's major sports teams or an evening on Seattle's famous music scene especially inviting.
There's a gold mine of things to do and places to visit, so come early or stay on after IRTA '99. Just check your conference packet for more information on the sights and attractions of the Puget Sound.
by Robert C. Mirone
In early March, IRTA held its first Gulf Coast Regional Luncheon in Houston, Texas. The primary speaker for this well attended meeting was IRTA board member John La Rue of the Port of Corpus Christi, Texas. We all benefited from John's discussion of trends in the refrigerated cargo business and the outlook for that industry .
Manning the oars to organize this successful event was board member Monica Fekete, a Houston lawyer with the firm of Brown, Sims, Wise & White. She made all the arrangements including sending out the announcements and ordering the menu.
Monica, we all owe you congratulations for a job well done. Your work helped us to connect with other members and to strengthen our individual business connections as well as our association.
Seattle Convention
In June, IRTA will offer another opportunity for members to get together. As you are probably aware, our fifth annual convention will be held June 13-15 in Seattle, Washington. This meeting, which is our primary undertaking during the year, has been extremely successful in drawing us together in the past.
Looking back at the last four conventions, I am struck not only by the educational opportunity that these meetings provided but also the great amount of networking that took place. On reflection, this is easy to understand, because of the broad range of the participants including carriers of all types, shippers, bankers, insurers, surveyors, claims agents, and warehousemen. This diversity underscores the fact that we are engaged in all aspects of refrigerated goods, and there is always someone present with whom a personal relationship begins or augments business dealings.
But the convention isn't all work and no play. This year, the convention committee has again organized a golf tournament. It will be held at Seattle's Classic Country Club. In addition, there will be a number of guided tours that will provide opportunities to get to know one and another while enjoying the many interesting aspects of our host city.
Our formal program will focus, in part, on the needs of a variety of markets involving perishable goods (such as fresh fruits and vegetables, meat and poultry and dairy products) in the forthcoming millennium. All aspects of reefer transportation will also be covered including logistics issues and the design of equipment available to both shippers and carriers serving niche markets. In addition, we will hold a moot arbitration procedure.
Executive of the Year
The centerpiece of our convention is the IRTA Executive of the Year Award, which will be presented at our luncheon on Monday, June 14, to Seattle's John C. Rosling, president and owner of CITYICE Cold Storage Company. CITYICE, which is located at the Port of Seattle's Terminal 91, specializes in serving the seafood industry with emphasis on the distant water factory trawler fleet.
John is also president of Myers Metals & Minerals, which recently was active on the West Coast of the U.S. in the international steel trade and industrial raw material business. He has served in various other capacities such as being a director on the boards of several organizations including the Albers School of Business and Economics of Seattle University. Previous to his work with CITYICE and Myers Metals, he served as an officer in the U.S. Navy.
We can learn much from this worthy recipient of our award. IRTA's Board of Directors and I look forward to presenting the award to John and to seeing all of you in the Emerald City.
Vickers Resigns from IRTA Board
Unfortunately, not all of my news is so upbeat. I am sorry to report that Peter Vickers, one of IRTA's original board members has resigned due to the demands of his business as a consultant and his work for the Society of Marine Consultants.
Peter, you have added much to IRTA, particularly with your efficiency and organizational skills. It is my hope, as well as that of our other directors, that you somehow can find the time to rejoin us.
Consolidated and reprinted with permission from The Journal of Commerce
The United States won World Trade Organization approval in April to impose sanctions worth millions of dollars on goods from the European Union in the long-running banana dispute.
The U.S. successfully argued before the WTO that the EU was guilty of imposing banana import rules (referred to as the "banana regime") favoring producers in former European colonies in the Caribbean and Africa over Latin American producers and U.S. marketing companies.
The WTO ruled that the EU must change its rules or pay restitution to the U.S. in the form of 100% tariffs on $191.4 million worth of luxury exports such as gourmet cheeses and leather handbags.
The amount is significantly below the $520 million the United States estimated the banana regime cost U.S. companies. However, the Clinton administration said it is still the largest damage award ever approved by the Geneva-based WTO.
A Fight Is Unlikely
In Brussels, officials said the EU was unlikely to fight the WTO ruling and would instead make changes to its controversial system of banana imports rather than indefinitely put up with the tariff problem.
Brussels cleared the way for the WTO go-ahead when its envoy told the organization's Dispute Settlement Body (comprised of all 134 WTO member countries) that the European Union would not object and recognized that its controversial banana import regime had broken trading rules.
If the EU decides not to appeal the WTO decision, then it will focus on trying to make to the banana regime WTO-compatible. This would defuse a dispute that has dogged trans-Atlantic trade relations for six years.
EU Parliamentary Approval
However, if and when this happens, the European Farm Commission will have to consult the European Parliament and win member state approval for any proposal to change the rules. So it could be September or so before a final decision is reached, EU sources said.
Meanwhile, although the banana battle may be petering out, the EU and United States are still preparing for a showdown over the EU's ban on imports of hormone-treated beef.
Rotterdam Outstrips Port of Hamburg
Reprinted with permission from The Journal of Commerce
The Home-Field Advantage isn't what it used to be, especially for the Port of Hamburg. Instead, geography-and transport links to the hinterland-are making the difference in the tight competitive race among North Europe's mega-ports.
The latest proof came in a study released last winter that showed Rotterdam, in the Netherlands, outstrips Hamburg in serving the southern and western cargo markets of Germany, Hamburg's own country. The study was carried out jointly by Rotterdam Municipal Port Management and the Netherlands Bureau for Economic Policy Analysis.
Rotterdam's dominant position in serving Germany's industrial markets is due to a combination of factors: It is closer geographically to those markets than Hamburg is, and it benefits from strong road and inland waterway links to Germany's Ruhr valley.
But the study noted that the port must improve its links with western and southern Germany to hold on to its lead. It also said that Rotterdam must increase the number of players operating in the port area-especially those representing German industrial interests.
Reprinted with permission from The Journal of Commerce
A series of rail freight mergers in Europe, which many see as the last best hope for propping-up a tottering industry, has raised fears among shippers that newer, bigger monopolies are in the making.
The mergers-separate deals involving the freight networks of Germany and the Netherlands; Switzerland and Italy; and the Nordic countries, among others-may go a long way toward solving long-standing problems over connections and cooperation among neighboring rail systems.
But, according to some rail shippers, ports, ship lines and barge operators, the mergers could create railroad monoliths that are even more anti-competitive than today's state-owned monopolies. That, they say, would distort competition in the Continent's transportation markets.
German, Dutch Deal Feared
Most of the complaints have centered on the first and largest merger, between the cargo divisions of Germany's dominant Deutsche Bahn AG (DB) and its much smaller Dutch counterpart, Nederlandse Spoorwegen (NS).
Early this year, that merger already was taking shape at the operating level, although it had not been concluded legally. The deal-both legal and operational-is expected to be completed by early 2000.
"We think there is a danger that they will have a monopoly over one of the main rail corridors in Europe," said H.J.M. van der Wyck, chairman of the Centraal Bureau voor de Rijn-en Binnenvaart (CBRB), the Dutch barge-owners' association in Rotterdam.
The CBRB, through its European umbrella group in Strasbourg, France, has written to European Competition Commissioner Karel van Miert protesting the merger. So has Britain's Rail Freight Group, which represents shippers, among others. Its letter to Commissioner van Miert says that mergers can be useful ways to improve interoperability, but suggests that the European Union delay the merger until it has opened access to monopoly state-owned rail lines.
Ship Lines Express Doubts
Other organizations, including major ship lines operating at the Port of Rotterdam and using rail to reach inland markets, also express doubts about the merger, although they have not put them in writing to Commissioner van Miert.
The railroads, in dismissing the worries, say the critics are missing the point of the mergers and misstating the merging companies' intentions.
"We think it is a little exaggerated," said Rene Holdert, a spokesman for NS Cargo. "There is no question here of monopoly. Railways in Europe average 15% of total traffic flows. In Holland, it is even less, about 5%. So you can't fear us as being a big monopolist."
Mergers among freight railroads, even dominant ones like Deutsche Bahn, "are not inherently counter to liberalization," noted Anton Hoser, freight director of the Osterreichischen Bundesbahnen (OBB), the Austrian Federal Railway.
However, merging railroads that use their monopoly power to block access will quickly face retaliation from their neighbors, with the result that less freight will move on the rails, Hoser said.
Nonetheless, shippers who depend on rail service worry about the terms of their access after NS Cargo is merged into DB Cargo, particularly since the German railroad recently raised its rates between 15% and 25% for selected categories of clients. "Deutsche Bahn has one of the worst records of any European railway for anti-competitive practices," said Lord Tony Berkeley, chairman of the Rail Freight Group, in his letter to Commissioner van Miert.
"Because of its size and dominant position, it is likely that many other organizations that might otherwise submit a formal complaint (under EU antitrust law) are dissuaded from doing so, since any such action might well result in commercial suicide of the company concerned," Berkeley added.
Complaints about Pricing
Intermodal operators, including the pan-European Intercontainer-Interfrigo, also have complained that steep price increases charged by DB were aimed at hobbling them in a competitive market.
"There is a lot of muttering going on right now about the German railway," said Bryan Stone, an intermodal consultant in Ettingen, Switzerland. The Dutch railroad, he said, "has had an open and tolerant attitude toward on-line competition, allowing competing operators to come in. Some customers are worried they could lose the support they have had."
Those worries are particularly strong among ship lines and port officials in Rotterdam and Antwerp, who have a long history of competing against the north German ports of Bremen and Hamburg for inland access. The European Commission last year imposed heavy fines on Deutsche Bahn for pricing its inland services from the north German ports at preferential rates, which put the Dutch ports at a disadvantage.
Some of the major carriers operating in Rotterdam "have concerns about potential rebuilding of a monopoly," but have not taken legal action, said Peter Jacobse, director of intermodal services-Europe for Sea-Land Service Inc. in Rotterdam. Deutsche Bahn and NS have said the merger will lead to efficiency gains, but "it remains to be seen whether that is passed on to customers," he added.
Barge Operators Concerned about Subsidies
Barge operators, meanwhile, worry that the merged railroad may use state subsidies and monopoly profit elsewhere to underprice its services on the Dutch stretch, with the aim of driving competitors out of business.
"We have seen the same thing on the Channel Tunnel," said Chairman van der Wyck of the Dutch barge operators' association, referring to competition from rail freight services that drove down rates charged by freight ferry operators.
"As long as we don't know how commercial tariffs will be decided upon, we worry about the control they would have," he added.
The European competition authority, known as DGIV, is not exactly sure whether it has a say over this merger.
"EU jurisdiction is not clear yet," said a DGIV official. "It is not clear whether they have to receive approval from Brussels" or from national antitrust bodies. As a result, antitrust officials have not replied to the concerns raised by the barge operators or by the Rail Freight Group.
Reprinted with permission from The Journal of Commerce
Increasing demand for fresh produce in China and for export is creating opportunities for manufacturers of refrigerated railcars. Nearly 80 million metric tons of fresh or perishable commodities are moved a year in China, most by rail. The country's current fleet of reefer cars (about 7,500 according to Chinese government figures) can handle only 20% of that tonnage.
Chinese officials say they would prefer that domestic suppliers make more railcars, but that requires better technology and specific expertise. That, in turn, would seem to open a new niche to overseas suppliers.
The severe shortage of refrigerated railcars means that more than 95% of all fruit, vegetables and other perishables moved around the country go in open freight cars, resulting in huge waste. In the case of frozen fish, shrimp and other products, losses can run to one-third of shipments. Annual economic losses arising from the lack of cold storage transport in China are put at 1.7 billion yuan ($205 million), by the Jingji Ribao (Economic Daily).
Thousands of Reefers Needed
By the end of 1999, it is estimated that the volume of perishable freight in China will approach 74 million tons a year. Analysts say China would need nearly 30,000 reefer cars to handle that volume-a tall order.
The Wuchang shipyard and railway manufacturing plant in Wuhan, capital of central Hubei province, is the only firm in China designing and making refrigerated railcars. Its capacity is 500 a year, and by the end of next year is expected to reach 1,000 cars a year. Moreover, China has a very small selection of refrigerated railcars to choose from. Fixed temperature and mechanically refrigerated cars that must be used in groups of five or 10 dominate the mix.
Transport officials accept that China is well behind even such economically troubled countries as Russia in providing refrigerated rail movement. They say Russia handles 50% of its refrigerated transportation needs. China's total transported freight of perishable goods is 20% that of Russia's total freight, although the number of China's refrigerated freight cars is only 7% of Russia's.
Lagging Far Behind Europe
China's total transported refrigerated freight is 5.5 times that of Europe, but the number of refrigerated cars in China is only 28% of Europe's total.
The country is also short of refrigerated containers. While it produces up to 80% of the world's basic containers each year, they are mostly standard, dry types. Shipping lines and other users say the higher-value reefer and specialist containers-which can fetch $25,000 apiece-are generally bought elsewhere for quality reasons.
Hong Kong's main container line seized an opportunity late last year to inaugurate China's first train service moving refrigerated cargo from inland areas to the coast. Known as reefer-on-rail, the service by Orient Overseas Container Line (OOCL) Ltd. and the China Railway Container Transport Center offers a maximum load equivalent to eighty 20-foot containers, though actual loads vary according to demand. If the route proves successful, the shipping line will examine others.
"We are creating new infrastructure for new exports from China. The agricultural sector has great potential, but needs the infrastructure to move its goods," said N.K. Balling, an OOCL spokesman.
Potential Uproar over Beetle Infested Chinese Pallets
Condensed and reprinted with permission from The Journal of Commerce
Businesses importing from China should be prepared to abandon hardwood packaging and pallets because of the potential public uproar over the Asian longhorned beetle. The beetle slips into this country burrowed in woods that Chinese exporters use for packing crates and shipping pallets.
The war on the tree-eating beetle has not yet become political in the United States, but experts say it likely will as more old hardwood trees have to be cut down to prevent further spread of the beetle. The beetle has no known predators in North America.
In March, the federal government declared states of emergencies in New York and Chicago due to longhorn beetle infestations. The Agriculture Department (USDA) has said that left unchecked the beetle will devour vast American forests and inflict $41 billion in damage to an array of industries.
As an interim measure, the USDA's Animal and Plant Health-Inspection Service last December banned the importation of any wood packaging that had not been chemically treated before leaving China.
The USDA has said that stricter measures could be announced by summer. It is considering regulations that would strongly encourage, or possibly mandate, the use of non-hardwood packaging for imports from China.
Public policy experts say it would be wise for importers to investigate alternatives and be ready to adopt them if regulations are changed. Alternative packing materials that are on the market, such as fiberglass or rubber pallets, are expensive and would have to be sent to China.
Slip-sheet pallets, which consist of tough cardboard sheets, are already in Asia, but would require upfront costs of several thousand dollars for fork-lift fittings.
Reprinted with permission from The Journal of Commerce
Daunting problems such as rail operating restrictions, incompatible systems and a lack of management vision are relegating intermodal service to a potential-rather than a real-logistics solution, according to five industry experts.
Their opinions, assessing commercial opportunities in Europe's fragmented intermodal markets, were offered from a different perspective, more than 3,500 miles away, at the International Intermodal Expo in Atlanta, Georgia, last month. The experts conclusions are in line with what shippers and transportation executives worldwide have been saying for years.
Complex Distribution Pattern
Tim Bent, logistics director for ECC International, sketched a complex distribution pattern for the Cornwall, England-based specialty minerals company. That pattern included multiple combinations of multimodal transport in the company's European operations, but almost no rail intermodal options.
In Europe, with its strong national self-interest, the good intermodal intentions of rail operators are difficult to deliver due to differences in equipment standards, tracking systems and information technology, he said. Bent identified several barriers to intermodal transport, including different maximum gross vehicle weights in European countries and moves by some governments to blunt the forces of deregulation by raising taxes and fuel prices for road operators.
"We don't have the capability to use rail as we should," Bent said.
European rail service "desperately needs a can-do, want-to-do mentality." He added that European rail service is "expensive and fragmented."
Europe also lacks a logistics provider that can meet his company's needs all over the Continent, Bent said.
"Our interest is in a cost-effective supply chain," he said. "Inflation adjustments are not an option. Third-party logistics providers just want their 5% or 10% annual increase. Logistics providers have to listen to what the shippers want."
Progress Has Been Made
In contrast, Robert Goundry, an executive for British-based intermodal operator Freightliner PLC, attempted to direct the discussion toward specific areas where intermodal has shown progress. He said his company boosted its revenue by 34% and volume by 27% since it was privatized less than four years ago.
Goundry pointed to the company's record of 98% on-time delivery within ten minutes of schedule for a variety of customers that included intercontinental container traffic, automotive traffic, trailer-on flatcar shipments and coastal shipping services to Europe and Ireland.
"Despite all the obstacles, there is a way to make effective changes," Goundry said.
Delivery Restrictions
Jean Luc Renaux, the North American representative for the European Intermodal Association, identified intermodal opportunities that could arise from long-standing European policy that favors "sustainable mobility." That approach embraces steps such as delivery time restrictions in congested metropolitan areas that are justified on environmental grounds.
London-based consultant David Baker identified a similar opportunity that he connected to the growing pressure to deliver on so-called J4U (just for you) services such as goods ordered through electronic commerce.
"The issue isn't that we are competing road vs. railroad," he said. "We need both."
Baker also maintained that shippers, especially retailers, are in a strong position because they control economic volume and decision-making that can shape the outcome of commercial mobility issues such as nighttime flight bans that restrict deliveries.
William Bourque, vice president of railcar manufacturer Greenbrier International, said his company is staying out of the European intermodal market in order to concentrate on a recently acquired manufacturing plant in Poland.
Bourque reeled off issues-such as a proliferation of equipment designs, clearance restrictions, axle load limits and train length strictures-that helped produce that decision.
Formerly an intermodal executive in the United States before joining Greenbrier, Bourque said that his company is "not an active participant in the European intermodal market." He added that the intermodal market is "a major growth opportunity, but it is very fragmented."
To back up his point, he said there were 43 competitors in the rail equipment manufacturing sector in Europe, compared with six in the United States. He also noted that conditions may change because the Western European equipment manufacturers with proven equipment designs could turn to Eastern Europe, where there are lower labor rates.
Reprinted with permission from The Journal of Commerce
The railroads' latest effort to recapture perishables traffic lost over the years to trucks began moving in an unusual place this spring-Amtrak trains where passengers will consume the same kind of citrus fruit that's sitting not far away in a refrigerated car.
The object is to resuscitate railroads' shrinking share of perishables traffic and to generate new Amtrak revenue to offset operating losses that have averaged $500 million or more in recent years.
Despite a projected 60% increase in that business over four years, mail and express revenue of $107 million this year is a drop in the bucket compared with Amtrak's annual operating budget of $2 billion plus.
The actual service, is a joint effort of Amtrak and a Michigan marketing firm called ExpressTrak Inc., in which eight refurbished refrigerator cars are riding Amtrak trains between Los Angeles and Philadelphia, and between Los Angeles and Jacksonville, Florida.
Trucking Dominates Market
Economics is the driving force behind the railroads' latest effort to extricate themselves from their perishables predicament. Better service and equipment utilization have given trucks at least a 90% market share of all food shipments, according to statistics provided by Standard & Poor's DRI, a Massachusetts consulting firm.
Statistics tell a dramatic story: Railroads hauled 26,615 loads of lettuce in 1982 and 1,412 in 1997. Citrus fruit traffic fell 60% in the same period, a victim of slow and inconsistent service and unreliable equipment.
Freight railroads' remaining refrigerator cars, the creaky remnants of a fleet that was nearly three times larger 15 years ago, carry about one load a month. Transcontinental travel time can be 14 days, one-way. In contrast, truckers make 70 or more transcontinental trips a year.
"With that utilization (of equipment), the numbers don't work," said Ed Ellis, Amtrak's vice president of mail and express. Low volume cannot justify purchase of new cars costing $200,000 apiece.
Refrigerated and perishables shipment are "a $15 billion market,"Ellis said. "This is the highest-yield business that is available to Amtrak that freight railroads have almost no piece of."
The same economics that took the freight railroads out of the perishables business may get Amtrak back into it.
"In two months, we can get as much utilization as a freight railroad gets in a year," Ellis said. "With our closed loop system, Amtrak can get three headhauls (eastbound loads). If we fill the backhauls (westbound moves), we get six loads a month."
Robert Smith, manager of transportation for Sunkist Growers Inc., has committed support to the new venture.
"We're interested in the ability to move a railcar equivalent of product at truckload transit time (four to five days cross-country)," he said.
Each refurbished refrigerator car accommodates between 2.6 and 2.8 truckloads of product. Amtrak passenger trains take less than three days to cross the country. Truck drayage to and from the railhead creates a service meant to match the trucks.
The More Options the Better
"The more shipping options we have, the better,Ó Smith said. "Though our product (citrus fruit) is relatively durable, the faster we can get it there, the better."
But Allen Lund, president of Allen Lund Co. of Bakersfield, Calif., said, "Amtrak has a big mountain to climb." Lund, whose company is one of California's largest produce brokers, questioned the appeal of rail service due to ongoing service problems.
"Nobody can spend a lot of time reloading a trailer into a boxcar. There are a lot of customers who do not like large deliveries of one thing,Ó Lund said. "They would rather have 400 cases of something seven days a week instead of 1,500 cases once or twice a week."
Kevin McKinney, vice president of marketing for ExpressTrak, hopes the venture eventually could support a fleet of 360 cars with modern refrigeration equipment and the capacity to run 90 mph.
"There is very little of this traffic (perishables and frozen food) moving by rail, except for potatoes," Mr. McKinney said. The potatoes move on Union Pacific Railroad, which also handles more than 10,000 annual shipments of poultry and meat exports to the Pacific Rim.
Stan Zbylut, UP's director of refrigerated products, said the railroad expects to move 45,000 frozen food shipments this year, around 10% less than recent years.
UP is shopping to replace its refrigerated fleet of 5,300 cars because its newest unit was built in 1972. The carrier is testing 50 prototype refrigerated boxcars with highway-style refrigerated equipment and a 40% larger payload.
"If we had the right car with the right service, the potential is there," Zbylut said. "Customer confidence is still an issue. It's much easier to lose a load than to get it back."
Transportation workers who are allowed to take naps on the job make for a sharper, better rested work force according to an article titled "Power Naps" that ran in the January 31, 1999 issue of The Denver Post. The Post interviewed a variety of experts including Pat Sherry, a professor at the University of Denver's (DU) Intermodal Transportation Institute.
In particular, Sherry has spent a number of years researching the benefits of breaktime naps in the railroad industry. Sherry maintains that brief naps can sharpen performance on the job and perhaps can help workers avoid accidents.
"Due to the 24-hour nature of the work in transportation, the people in that industry are more likely to need to manage their fatigue," the Post quoted Sherry as saying.
Sherry worked with the Burlington Northern Santa Fe Railroad to develop a breaktime nap policy for its more than 18,000 engineers and conductors. They are allowed 45 minutes per shift to catnap. However, while doing so, the train must be stopped and one other worker on board must stay awake.
Such breaks may occur, for example, when the workers are waiting for a stretch of track to be repaired.
Here are some other notes of interest from The Post article:
Cargo and Trucks Matched by Internet
The National Transportation Exchange (NTE), based in Downers Grove, Ill., offers an Internet service to match empty truck space with cargo that needs a ride. Its Web address is www.nte.net. The company is headed by Greg Rocque, president, and Greg Drevs, head of marketing.
"I think what they're doing is revolutionary and it's going to take a while for people to realize," says Greg Girard, research director for supply chain management AMR Research, Boston.
"But once they do, it's going to really take off," he said. "There's a lot of inefficiency in the transportation market of buying and selling transportation space today. (Carriers and shippers) don't get much chance to match need with capacity."
"NTE has helped us tremendously improve our equipment utilization without us having to add additional equipment," said Steve Gliesner, director marketing and sales at J&R Schugel Trucking Inc. in New Ulm, Minnesota.
Analysts agree with NTE's estimates that a shipper using the exchange is looking at 15-30% rate saving, and carriers are likely to find a 10%-95% profit margin on business, comparatively huge in an industry where margins of less than 5% are typical.
Air Cargo Prices Plunge on Atlantic Runs
Reprinted with permission from The Journal of Commerce
If you have been shipping products by air across the Atlantic this spring, it has been a good time to get extremely low rates from the airlines. As capacity far exceeds demand on routes from the United States to Europe, carriers have embarked on a bitter fight for cargo.
Prices across the Atlantic used to be more than $1 per kilo, but now carriers routinely offer rates around the 60 cent mark. Spot rates may be as low as 40 cents a kilo.
"Airlines are offering some really ridiculous rates. I haven't seen such rates on a regular basis before. Usually only spot rates went that low,Ó said Mike Bujold, vice president of sales and marketing at Schenker International, a large multinational forwarder.
The rate war was triggered by a huge influx of freighter capacity on the North Atlantic in the last quarter of 1998, as airlines redeployed freighters from Asian routes, which had seen a huge decline in yield. This situation was compounded by relatively weak demand to Europe through March.
It's not only freighter operators that are putting pressure on rates; some airlines point the finger at passenger carriers as the main culprits.
Carrier executives have little hope that prices will go up again any time soon, as passenger carriers traditionally increase their schedules in spring and summer to accommodate higher passenger traffic.
If anything, capacity will grow even further. Charter operators usually enter the trans-Atlantic market between spring and fall. To offset the disadvantage of only having a temporary presence in the market, they normally offer lower rates than the scheduled airlines.
Moreover, carriers like American and Continental are replacing smaller aircraft on their trans-Atlantic routes with Boeing 777s this year, which can carry a lot more freight.
Bujold predicts that "it really could be an absolute bloodbath."
Have Your Colleagues Joined IRTA?
Do You Want To Help Our Association Grow? Why not pass on this membership information to a friend? Better yet, share your copy of The IRTA Report so they can get an idea of what they are missing.
For annual dues of $75, IRTA members receive numerous services including:
Seattle Tours, Golf
Opportunities to relax and enjoy yourself await at IRTA's annual convention, June 13-15 in Seattle. Below are some brief descriptions of opening day pastimes for you and your guests.
IRTA Golf Tournament,
8:30 am-2 pm, June 13
Join us at the beautiful Classic Country Club's course, which Golf Digest has rated one of the best places to play in the nation.
Tour: Hiram Locks/Pike Place/Space Needle
9 am-3 pm, June 13
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Tour: Museum of Flight/Pike Place/Seattle Aquarium
9 am-3 pm, June 13
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Sunday, June 13
8:30am-2:00pm
Golf Tournament at Classic Country Club
9:00am-3:00pm
- Tour - Hiram Locks/ Pike Place/Space Needle
- Tour - Aquarium/Pike Place/Museum of Flight
5:00pm-5:30pm
IRTA Annual Membership Meeting
5:30-7:00pm
Welcome Reception - Sponsored by Carrier Transicold and Sea-Land Service, Inc.
Monday, June 14
7:45-8:15am
Continental Breakfast - Sponsored by Port of Corpus Christi
8:15-8:30am
- Welcoming Remarks
- Robert C. Mirone, President, International Refrigerated Transportation Association
- Willy Morgan, Executive Vice President, The Journal of Commerce Print Group
- Mic Dinsmore, Executive Director, Port of Seattle
8:30-9:00am
- Keynote Address
- Patrick Hanemann, CEO, Majestic Valley Produce
9:00-10:30am
- Shipper/Carrier/Receiver - Where are the Shortfalls? What Will be Needed to Serve Markets in the New Millennium?
- Bill Mongelluzzo, West Coast Editor, The Journal of Commerce (moderator)
- Fresh Fruits & Vegetables
- Newton Bayless, President & CEO, Century Truck Brokers
- Meat & Poultry
- David Rind, Rind International Trading
- Dairy Products
- Mike Bevers, Director of Logistics, Darigold, Inc.
10:30-10:45am
Coffee Break - Sponsored by Port of Tacoma
10:45am-12:00pm
- Shipper/Carrier/Receiver (continued)
- Bill Mongelluzzo, West Coast Editor, The Journal of Commerce (moderator)
- Seafood
- Frank Breen, Vice President & General Manager, Seafreeze Cold Storage
- Horticultural Products
- Matt McLean, Managing Director, Express Northwest International
- Beverages
- Terry Priest, Manager of Corporate Logistics Commerce, Coors Brewing Company
12:00-1:30pm
- Luncheon - Co-sponsored by Port of Everett
- IRTA Executive of the Year Award
- Presented to John C. Rosling, President, CITYICE Cold Storage
- Dr. Trevor Suslow, Ph.D., Postharvest Extension Specialist, Department of Vegetable Crops, University of California Davis
2:30-2:45pm
Coffee Break - Sponsored by Coastal Transportation, Inc.
2:45-4:15pm
- Reefer Transportation Logistics - Designing Equipment and Services to Meet Customer Requirements and Develop New Markets
- Bernard S. Sain, President & CEO, International Transportation Logistics (moderator)
- Paul Robbins, President & CEO, Caribbean Shipping
- Mike D. Shea, President & CEO, Sea Star Line, LLC
- Richard Smallwood, Director, Container Sales North America - Eastern Region, Central America, South America, Thermo King
- Philip G. Noury, Vice President Gemini, Landstar
- Quarantine Requirements
- Miguel A. Cea, President, Ag-Fume Services, Inc.
- Richard Simpson, Senior Vice President, Crowley Maritime
- Glenn Patch, President, MTM Consulting
4:15-5:00pm
- Information Technology - Need to Know: Customs, Census and FDA Bring Shippers up to Speed on Y2K and Beyond
- Patrick Burnson, Editor North America, Shipping & Trade News/Reuters Air Cargo Service (moderator)
- The Automated Export System (AES)
- Leslie Albertson, AES Outreach, U.S. Customs Service
- Automated Customs Systems
- Jerry Levitt, Port Director, Southern Puget Sound Region, U.S. Department of Agriculture
- Cargo Clearance Procedures
- Danny L. McClincy, Chief Inspector, Trade Operations, U.S. Customs Service
5:30-7:30pm
Cocktail Reception at the World Trade Center - Sponsored by Port of Seattle
Tuesday, June 15
8:00-8:30am
Continental Breakfast - Sponsored by Thermo King
8:30-10:30am
- Reefer Transportation - New Developments
- Patrick Burnson, Editor North America, Shipping & Trade News/Reuters Air Cargo Service (moderator)
- Air vs Ocean
- Don Ehrlich, President, Perishables International
- Container vs Reefer Ship: A Shipper Perspective
- Joel Greenberg, Regional Director Refrigerated Commodities, American President Lines
- Jumbo Containerships and Load Centers
- Barbara Pratt, Director Refrigeration Technology, Sea-Land Service, Inc.
- Third Party Service Providers
- Gerald P. Murphy, Director Refrigerated Services, Danzas Corporation
- Ocean & Transportation Deregulation
- Brent Evans, Independent Administrator, Food Shippers Association of North America
- International Reefer Cargo: Trends and Prognostications
- Robert Hannus, Lecturer, School of Marine Affairs, University of Washington
10:30-10:45am
Coffee Break - Sponsored by KSW Systems and Westfalia Systems Technology
10:45am-12:00pm
- Mock Arbitration
- Monica A. Fekete, Attorney, Brown, Sims, Wise & White
- Peter Read, Chartered Loss Adjuster/Lawyer, West of England Shipowner Insurance Services, Ltd.
- George N. Proios, Attorney, Lyons, Skoufalos, Proios & Flood, LLP
- Joe Carone, Marcigliano & Campise
- Lucienne C. Bulow, President, Society of Maritime Arbitrators, Inc.
- Bert Markovich, Schwabe, Williamson & Wyatt
- Stephen J. Galati, Attorney, Mattioni, Ltd.
For more information and electronic registration, please contact the International Refrigerated Transportation Association on the Web at www.irta.org.
Please note the following corrections to your IRTA membership directory as of May 1999.
- change name to William Larsen, Larsen Global Marine, Inc., and change zip to 07027-1312
- change area code for phone and fax to (206)
- delete listing
- add e-mail pzottoli@medship.com
- Lyons, Skoufalos, Proios & Flood
- 1350 Broadway, Suite 1507
- New York, NY 10018
Do you have an idea for an article related to refrigerated transportation that you'd like to suggest? Have you found a story in another publication that you think would be worth reprinting? Would you be interested in writing for our newsletter ? We want to hear from you. You may contact The IRTA Report by e-mail: irtamail@aol.com, by writing us: The IRTA Report, 4255 South Buckley Road, Suite 118, Aurora CO 80013 or by calling: (303) 690-3233; FAX (303) 690-3278. We look forward to hearing from you.