Kunming to Hanoi Highway Planned

The Asian Development Bank gave the green light last Friday to underwrite the Vietnamese side of a major deal to create a four lane highway from Kunming, China to Hanoi, Vietnam. The entire project is projected to be completed in 2012 and should help facilitate economic expansion in China’s Yunnan Province.

Via International Herald Tribune:

In a meeting Friday at the headquarters of the multilateral lender in Manila, the board approved its biggest single-project loan – $1.1 billion – to finance the start of work next year on a 244-kilometer, or 152-mile, stretch of the highway from Hanoi to Lao Cai on the border, the bank said in a statement. The Vietnamese government is contributing $100 million to the low-interest loan, to be paid off over 32 years.

The construction will add a section to the ambitious Asian Highway program under which 27 Asian countries have pledged to build a 140,000-kilometer network of roads that meet minimum uniform standards.

I see a couple of major benefits for both China and Vietnam in the deal. First, Vietnamese exporters will have access to additional manufacturing opportunities in China. Second, China will have access to Northern Vietnam’s seaport facilities.

We have all heard about the woeful state of Vietnam’s logistics infrastructure, but I expect that this new highway linking China to Vietnam will accelerate the growth and development of both Yunnan’s and North Vietnam’s logistics capabilities.

Will airport unions in the UK shut down airports during January?

They’ve voted to strike, so it certainly seems likely. Via MSN.UK:

The Unite union said its members will walk out three times next month in protest at the closure to new employees of the final salary-linked pension scheme of airport operator BAA.

“Without doubt, in my view, it will result in the closure of those seven airports during that timeframe,” its National Aviation Secretary Brendan Gold told a news conference. “There will be a huge amount of disruption.”

Union members will stage three strikes: two 24-hour walkouts starting at 6 a.m. on January 7 and January 14 and a further 48-hour strike from 6 a.m. on January 17.

Those taking part include fire crews, security staff and clerical workers.

The strike will affect the country’s biggest airport Heathrow, as well as Gatwick, Stansted, Southampton, Glasgow, Edinburgh and Aberdeen airports.

Oh yeah. That would be a great start for the UK economy in 2008.

Christmas Cargo theft?

This is all over the press wires, a couple of guys (possibly three) posing as police officers hijacked a FedEx tractor trailer full of Christmas gifts and product, drove around for three hours, and then let the driver go with the tractor still locked and supposedly all the cargo still inside:

The heist began Thursday night on a Manhattan street as the truck headed to Newark, New Jersey.

A maroon sport utility vehicle cut off the truck and the hijackers got out and flashed two guns and a silver badge, police said.

The driver told police he thought there was a third suspect as well and the men had heavy Eastern European accents.

They forced the driver face-down into the back of the SUV, told him to handcuff himself and drove him around for three hours before abandoning him in Brooklyn.

The driver, who was not identified, flagged down a patrol car. The truck was found abandoned nearby.

Very strange. Seems like a lot of effort (badges and guns) and planning for nothing if all they did was release the driver and abandon the trailer. Of course, it remains to be seen if anything did go missing, if not then why did they hijack the vehicle and then let it go? Did they target the wrong truck? Or was it for another reason?

Bunker Fuel Suppliers: Credit Risk

According to this article from Channel News Asia:

Prices of bunker or shipping fuel are estimated to have jumped by 80 percent over the past year in Singapore.

According to Ocean Intelligence, shipping companies have been increasing their credit lines to finance their operations and it warned that the fallout could hurt the industry.

Matt Cape, director of Ocean Intelligence, said: “(If) one company defaults on bunker payments, a bunker supplier could possibly fold. That, in turn, could have an impact on the insurance company of that bunker supplier and the bank that extends credit lines to that bunker company.

“Those banks and insurance companies will, in turn, put pressure on ship owners and suppliers and you’d have a vicious circle whereby the terms of credit are brought tighter and tighter, making fuel more expensive and making it more likely that ship owners will default.”

Numbers from Ocean Intelligence show that across the 11 major liner operators in the world, profits declined by about 58 percent from 2005 to 2006. The year before that saw a decline of only 2.5 percent.

While I feel for the ocean carriers and certainly want them to stay solvent, the real problem has to do with how they assess and manage their costs. I am of the opinion that many of them don’t really have a good handle on their costs or how to assess them for the future. From the same article:

Analysts have suggested that shipping companies invest in technologies to be more fuel-efficient and to consider changing routes or revising cost structures.

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