The new screening regulations will not impact our scheduled domestic air operations, so we can assure you of our ability to offer on-time delivery of your overnight and/or second day air shipments to major cities across the USA.  Our transport solutions offer you the ability to tender your freight in a manner that best suits your business requirements. 

Be assured, that Unitrans is ready and fully able to comply with the new screening rules, and in the process is able to provide the service integrity and consistency on which you depend and deserve.

“The United States should work with South Korea to resolve legitimate concerns and quickly approve the U.S.-Korea Free Trade Agreement.  This step could be a significant part of the President’s goal of doubling U.S. exports over the next five years to create well-paying American jobs,” said Chairman Kerry.  “South Korea ranks among our very closest allies and partners. When Seoul hosts the G-20 meeting this November, I hope the United States can point to substantial progress on KORUS as part of a broader U.S. engagement with the Asia-Pacific region.”

Lugar adds “Improving trade is critical to meeting our economic and diplomatic challenges around the globe. South Korea is an important country and economy. Approval of this agreement will lead to greater opportunities”. Senator Lugar has been a long-time advocate of the US-Korea Free Trade Agreement.

The EU regulation becomes effective Jan 1, 2011 and will place the burden of compliance on carriers.  Importers and exporters will have to provide the timely and accurate information or face having their shipments to be delayed.  Not surprisingly, shippers and transporters are voicing their concerns about how the information will be gathered, how the ICS will be financed, and how this effort will be launched across 27 European countries.

The biggest short-term economic impact from the Gulf Coast oil spill could be a disruption of U.S. commerce through the Gulf shipping channel.  Reports say a full shutdown of shipping lanes is unlikely, but significant delays could develop if cargo ships must have oil washed off their hulls before moving upriver.

This disruption could also have broader transportation flow effects by affecting the barge, container, and tanker traffic in the Mississippi Delta and on the Mississippi River. If traffic is affected for any extended period of time, then the prices of all types of commodities could rise.

Some of the ripple effects of disruptions in and out of the Port of New Orleans on freight networks could be the diversion of some cargoes, such as export grain, to other destinations.

For instance, it could push more Midwest farm shipments off barges and onto trains headed for West Coast ports, or onto ocean ships at Great Lakes ports that move into the Atlantic Ocean through the St. Lawrence Seaway.

Aside from possible effects on the supply chain, the spill can hurt the Gulf region’s fishing and tourism industries, depressing both direct and indirect incomes from that activity.

The impact on overall U.S. commerce was hoped to be small if responders could contain the spill quickly enough.  However the impact on local industries was feared to be large.  Fishing in the Gulf is already hurt from a 10-day ban. Gulf fishing generates annual dockside sales of $660 million, employs about 27,000 people in Louisiana alone and is second in size only to Alaska’s fishing industry. If the closure lasts long enough, it could raise fish and shrimp prices nationwide.

As it turns out, both local and national economics will be significantly affected.

Higher transportation costs of using alternative shipping lanes and ports could also price the loads out of the world market, delaying shipments until conditions improve. Authorities are anxious to keep the operational for Gulf shipping to maintain vital U.S. exports and imports.  The Lower Mississippi River ports export over 50 million metric tones of corn, soybeans and wheat each year, which is more than 55 percent of all U.S. grains inspected for shipment.

The new plan permits only concessionaires that are licensed by the ports and who are operating clean trucks to enter the terminals without having to pay a new truck impact gate fee. It further bans 2008, trucks older than 1988 from entering either port.

The Los Angeles rules go even further to ban the use of owner-operators at the port which may force more than 16,000 independent truckers to give up their trucks and become employees of the few larger trucking. It also imposes on the 1,300 drayage companies to only use employee drivers, which may force these small drayage carriers out of business.

Three agencies (the Transportation Intermediaries Association and the National Industrial Transportation League, and the American Trucking Association) have all filed opposition to the new rules. ATA is also challenging these new rules in federal court.

The new rules will cause a significant shortage of drayage capacity at these ports and a significant increase in rates while the remaining companies exercise their new-found market leverage.

With European airspace re-opened, the capacity for cargo is sparse, thus causing the airlines to charge premium rates for all new shipments that are three times the standard shipment rates.  We had already seen higher standard rates prior to the volcanic eruption in Iceland but this increase was centered more on exports shipments out of Asia because of the short supply of air and ocean capacity.  

To cope with the recession, airlines and ocean lines reduced capacity to cut costs.  As freight volumes have increased the shortage of ocean capacity has driven many shippers to transport their goods via air, further stressing air cargo capacity.  In Europe, even before this current volcanic event, again capacity was reduced as airlines reduced flights to save costs. 

Even after airspace has been re-opened, we expect capacity to remain in short supply due to the huge backlog of freight and passenger priority on passenger flights, and therefore increased prices.

Both an increase in global environmental awareness and greater regulatory and governmental pressures has combined to leverage companies into reducing their carbon footprints.  In Europe, “green legislation” is becoming a reality and eventually will in other countries.

One of the biggest carbon footprints is created through the supply chain and logistics operations in its production, storage, and transportation of goods. 

Therefore executives are rightly being forced to examine their approaches and respond accordingly.  Additionally, long-term competitive strategy is a primary concern and going green has become a crucial consideration towards achieving their goal of creating and advertising environmentally friendly supply chains.

There are three main challenges for the industry to overcome if green logistics is to become a reality.

1. Lack of appropriate technology in place to support companies in their effort
2. Lack of business processes needed to capture the data and use it effectively
3. The trade-off between green requirements and lean practices lending to smaller shipments rather than bundling.  

The supply chain going green is an industry issue that is only going to increase in stature. 

We at Unitrans are committed to going green.  Among many simple considerations we make are: reducing truck idling to save fuel and transmissions, recycling the use of packaging materials and shipping paper and metal products to a recycling company, and turning off lights in areas of the company that are not currently in use.

Now that the economy is sputtering back to life with more of a demand for shipments, the lack of supply in carriers is suddenly noticeable by the shippers.  This lack of supply is having two effects: slower transports and rapidly inflating prices.    

In the past few weeks, the pricing power of the carriers has translated into prices rising as much as 30% in some instances.  This is especially true in difficult transportation regions of the country (Northeast, Florida, Texas, etc).  The market is changing very quickly right now, to where a quote this week might be much higher by next week!

However, it is estimated that only 65% of international air cargo will be screened by the deadline.  It is likely that it will take two years for before 100% of the international cargo is being screened.  The new estimate is based on the current volume of imports  (1.5 tons annually from 97 countries).  The majority of imports (85%) come from 20 countries.

The TSA has advised the US Congress on at least 2 occasions that the deadline could not be met for internationally screenings. Warren Miller, head of the Air Cargo International Programs Branch of the TSA, shared this news recently at the airfreight security conference in Frankfurt, Germany.

The TSA has learned from its work on securing intra-US airfreight shipments that the focus should be on the supply chain, and not just solely on screening.  A long-term and layered approach based on risk targeting will be needed, but this concept has not even reached a pilot stage yet. 

As Miller says, while there is no single answer for screening, we do need to increase security without impeding the flow of commerce.  One obvious point is that precedents for risk management would be easier to implement in all-cargo freighter aircraft, rather than using the “bellyhold” cargo area of passenger flights.