Under the realignment, DB Schenker will transition its operations from an asset based model to a non-fixed asset model and will phase out their dedicated US based fleet. This portion of the business represents only 10% of their overall US business which was primarily serviced through their BAX Global integration. The US business serviced by DB Schenker’s international air, ocean, contract logistics and warehousing operations will remain fully operational and is unaffected by this realignment.

The following was given as reasons for the US realignment:

“As a result of the prolonged recession and spiking fuel prices, more and more of our customers are opting for expedited ground-based solutions instead of domestic air freight, and they are looking for partners who can provide transportation management services rather than transactional transportation,” said Heiner Murmann, CEO of Schenker, Inc.

Approximately 700 employees (primarily part-time positions) will be affected. The company has stated that they are working to redeploy as many employees as possible to other parts of the business.

With almost $3 billion in revenue, over 200 locations and in excess of 10,000 employees, DB Schenker is one of the leading logistics providers in the Americas. The company is currently ranked #2 in air freight, #4 in ocean freight and #5 in contract logistics and supply chain management in North America.

Commenting on the results, Mr. Herdman (AAPA Director General) said the following:

Over the first five months of the year, Asian airlines have seen 2.5 percent growth in the number of international passengers carried, whereas international air cargo traffic has declined 2.4 percent during the same period.  The combination of slower revenue growth and sharply higher fuel costs means airlines operating margins are under severe pressure.  Continued vigilance in controlling costs, and carefully matching capacity to the projected changes in demand will be the key to sustaining profitability.

Mr. Herdman also suggested that the decline in volume reflects some moderation in the pace of global economic growth when compared to a very strong rebound in global demand that we experienced last year.

It will be interesting to see if demand picks up as we head into the second half of the year.

Via JOC.com:

For the 17th year in a row, Hong Kong assumed the top spot in the rankings.

According to the report, economic freedom is described as “the fundamental right of every human to control his or her own labor and property”. The report gives each country a ranking of 1-100 where a score of 100 represents the greatest amount of freedom. The rankings are based upon the following criteria:

1. Business Freedom
2. Trade Freedom
3. Fiscal Freedom
4. Government Spending
5. Monetary Freedom
6. Investment Freedom
7. Financial Freedom
8. Property Rights
9. Freedom from Corruption
10. Labor Freedom

2011 Top Ten Rankings
1. Hong Kong
2. Singapore
3. Australia
4. New Zealand
5. Switzerland
6. Canada
7. Ireland
8. Denmark
9. United States
10. Bahrain

The United States lowest ranking came in the form of government spending at 54.6.

In the most recent year, total government expenditures, including consumption and transfer payments, equaled 38.9 percent of GDP. Spending increases totaled well over $1 trillion in 2009 alone, an increase of more than 20 percent over 2008. Stimulus spending has hurt the fiscal balance and placed federal debt on an unsustainable trajectory. Gross government debt exceeded 90 percent of GDP in 2010.

The bottom five countries in order:

175. Venezuela
176. Eritrea
177. Cuba
178. Zimbabwe
179. North Korea

The report doesn’t indicate the volume distinction between the Waigaoqiao and Yangshan ports in the Shanghai area.

Singapore had a fairly robust year in terms of growth showing a 10% increase in container throughput over 2009. A recent report I read indicated that Singapore handled 28.4 million TEU’s during 2010. Singapore has consistently been ranked number one in the world as a major transshipment hub for cargo transiting Asia. Shanghai overtaking Singapore is definitely no small feat and shows how impressive the China machine continues to be.

Via OOCL.com:

We remain committed to meeting the needs of our customers and we would like to share this news with our valued customers about these newbuilds added to our fleet. We continue to commit substantial investment in assets to support the growth of our customers and the expansion of world trade.

The International Chamber of Commerce (ICC) has announced the launch of the new rule changes to Incoterms® 2010 which will be kicked off during a September event in Paris. The official implementation of the new rules are scheduled to take place during January of 2011.

On September 27th – 29th, the ICC will hold a series of practical masterclasses on the Incoterms® 2010 rules and provide a detailed presentation of the new rule changes that will be incorporated into the new Incoterms® 2010.

This revision, the first since 2000, will aim to adapt changes that have occured in global trade over the last ten years. According the ICC website, the reason for the changes include:

“The importance of cargo security, the resulting new obligations on traders, developments in container transport, and the 2004 revision of the United States’ Uniform Commercial Code, which resulted in a deletion of the former US shipment and delivery terms.”

Although the book has not been officially released, details on the ICC website show that the most glaring changes to the 2010 version will be the elimination of 4 Incoterms® including, DDU, DEQ, DES, and DAF. Two new terms will be added; DAT and DAP, bringing the new total of Incoterms® to 11.

Incoterms® 2010 will be arranged into the following groups:

Any Mode of Transport

CIP – Carriage and Insurance Paid
CPT – Carriage Paid To
DAP – Delivered At Place
DAT – Delivered At Terminal
DDP – Delivered Duty Paid
EXW – Ex Works
FCA – Free Carrier

Sea and Inland Waterway Transport Only
CFR – Cost and Freight
CIF – Cost, Insurance and Freight
FAS – Free Alongside Ship
FOB – Free On Board

In addition to the 11 rules, Incoterms®2010 will include:

* Extensive guidance notes and illustrative graphics to help users efficiently choose the right rule for each transaction;
* New classification to help choosing the most suitable rule in relation to the mode of transport;
* Advice for the use of electronic procedures;
* Information on security-related clearances for shipments;
* Advice for the use of Incoterms® 2010 in domestic trade

This interpretation is provided as a guide only.

Incoterms® are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms® 2010″. For a complete and official overview please refer to the ICC’s publication.

Via TSAcarriers.org:

“Neither shippers nor carriers were certain as to what direction the market would take coming out of the Lunar New Year holidays,” said Eng Aik Meng, APL Ltd. President, Liner. “Now it appears that the worst is behind us. Despite a pull-back in U.S. job creation and retail sales in May, the pipeline of Asian exports to the U.S. is filling rapidly and consumers are more optimistic over job security and household incomes going forward.” Mr. Eng emphasized that, while headlines have focused on peripheral issues such as European debt and U.S. tax and regulatory developments, many of the underlying fundamentals in the U.S. economy are positive: industrial production and durable goods orders are up, trade is expanding, inflation is low.

Revenue, however, continues to be a sticking point with the carriers. Many carriers faced record losses in in 2009 with the carriers losing a combined $15 billion.

While revenue gains made by carriers in recent months have made an important contribution to carrier balance sheets, carriers say the increases achieved in the current contract round still do not fully restore rates to the levels of late 2008, let alone provide for long-term viability and service expansion. In addition, to cover the costs of the expected robust peak season, individual TSA lines reaffirmed implementation of a previously announced Peak Season Surcharge.

TSA carriers are moving forward with aggressive plans to implement a Peak Season surcharge of $400 per FEU effective August 1. However, many carriers have already implemented a peak season surcharge effective in June.