Singapore's APL to quit Westbound Transpacific Stabilisation Agreement

SINGAPORE's APL, the container shipping arm of shipping group Neptune Orient Lines (NOL), is quitting the Westbound Transpacific Stabilisation Agreement (WTSA), the discussion forum covering the westbound trade from the US to Asia, with effect from September 1.

APL is the third carrier to leave the WTSA over the past decade, following in the footsteps of MOL's departure in June 2005 and previously Maersk Line, which was known at the time as Maersk Sealand and left the group in July 2002.

This reduces WTSA members to nine shipping lines: Hapag-Lloyd, Hyundai Merchant Marine (HMM), "K" Line, NYK Line, OOCL, Cosco, Evergreen, Hanjin and Yang Ming.

According to Alphaliner estimates, the remaining WTSA carriers, as of August, control 55 per cent of the total westbound Asia-North America capacity.

It said the 15 member ocean liners of the WTSA's eastbound counterpart, the Transpacific Stabilisation Agreement (TSA), control an estimated 92 per cent of total capacity on the Asia-North America route.

TSA members include: APL, Maersk, China Shipping, CMA CGM, Mediterranean Shipping Company (MSC) and Zim.

The Westbound Transpacific Stabilisation Agreement  (WTSA) was established in 1990 to replace a more rigid rate conference system for the US-Asia market. It offers a discussion forum for its members to develop non-binding guidelines relating to freight rates, surcharges and other fees.

NOL posts quarterly US$91 million LOSS with full-year decline expected

SINGAPORE's Neptune Orient Lines (NOL) has announced a net loss of US$91 million for the third quarter compared to a profit of US$282 million in the same period last year.

The group said its APL Logistics business reported higher revenue and a nine per cent year to date gain in operating profit, but container shipping dragged down overall results.

"The liner shipping industry is faced with slowing trade demand, excess capacity and fuel costs that are significantly higher than a year ago," said CEO Ng Yat Chung. "Our urgent priority is to drive down costs and increase efficiency."

NOL reported third quarter revenue of US$2.2 billion, down nine per cent from a year ago. It announced an operating profit loss for the period of US$72 million. In the first nine months, NOL's net loss stood at US$158 million.

APL, the liner shipping business of NOL, reported increased volume of seven per cent in the third quarter of 2011. Revenue declined 12 per cent and the business announced a Core EBIT loss of US$88 million. Revenue per FEU was 19 per cent lower in the third quarter of 2011 compared to the same period in 2010. Fuel prices increased 45 per cent in the third quarter from the same period a year ago.

"Higher volume was offset by increased fuel cost and lower freight rates," said APL president Kenneth Glenn. "In this environment, we must continue to concentrate on operational efficiency and managing costs down."

APL Logistics, NOL's supply chain management business, reported third quarter revenue of US$333 million, up 10 per cent from a year ago. Third quarter operating profit stood at US$16 million, down 11 per cent from a year ago. In the first nine months, APL Logistics has reported revenue of US$1 billion, up 15 per cent from 2010.

"We achieved our highest average weekly revenue ever during the third quarter and we continue to invest for growth," said APL Logistics president Jim McAdam. "But at the same time, we are actively managing costs as a reflection of uncertain economic conditions."

The group said that global economic conditions have not improved and with continued low freight rates in container shipping and slowing trade demand, it expects to report a loss for the full year in 2011.

picture: google.com / source: shippinggazette

Singapore's APL named best ocean carrier, also tops in innovative IT

SINGAPORE-based carrier APL, the container shipping arm of Neptune Orient Lines (NOL), has been awarded the "Global Ocean Carrier of the Year" and the "Innovation IT of the Year" by London's Containerisation International, winning over other leading rivals, among them, Maersk, CMA CGM and Hyundai Merchant Marine.

Said APL president Kenneth Glenn: "We're delighted to once more be recognised by industry peers for shipping excellence. This is an affirmation of our focus on providing customers with schedule reliability and service integrity."

The Innovation IT of the Year award was won in recognition of the company's development and implementation of its proprietary SMARTemp service, which uses satellite tracking to continually monitor the temperature and humidity of refrigerated containers carrying sensitive cargo. This makes sea freight a feasible choice for shippers with cargo traditionally shipped by air, said APL.

It was the second time in three weeks that APL was honoured as the world's top carrier. In September, it won the Ship Operator Award at the Lloyd's List global awards.

Other awards conferred to APL this year include Liner Owner/Operator of the Year by Seatrade Asia magazine in June, and best shipping line in both the transpacific and Asia-Europe trades at the Asian Freight and Supply Chain Awards in April.

source: shippingazette.com / picture: google.com

APL operates KODAK Cold Room Facility In India

APL Logistics has started running Kodak's Central Distribution Center in Mumbai, India. This houses a newly installed cold room facility for temperature-sensitive products.

APL Logistics converted a bare room into the 38,000-square feet high-tech facility after winning the contract to design, build and operate Kodak's new distribution center supplying to the domestic Indian market. Products being stored and disseminated out of this facility include digital cameras, photographic papers, motion picture films, digital printing plates and plate setting equipment, as well as chemicals.

"We're pleased to have delivered well against Kodak's stringent requirements," said Siddharth Adya, APL Logistics managing director for South Asia. "This demonstrates our capability in engineering as well as excellence in implementation."

Designed by APL Logistics solution engineering experts, the facility is unique because it has three different cold rooms of varying temperatures: ambient, 13 degrees and 21 degrees Celsius. To ensure that the facility runs at an optimal operational efficiency, the team has worked advanced cooling technologies and thermodynamics principles into its design. Kodak also required APL Logistics to migrate the operations from a former premise to the new one without disrupting its supply chain activities.

For a seamless data interface, APL Logistics has integrated its proprietary Warehouse Management System with Kodak's SAP system. This gives Kodak greater visibility over its inventory and greatly improved its accuracy in decisions.

Kodak India was established in 1913. Today, it is a leader in imaging, offering digital products and services for commercial and consumer use.

source: logasiamag.com

APL Logistics extends double-stack IndiaLinx train service to India

SINGAPORE's Neptune Orient Lines unit APL Logistics has announced that has run its first double-stack container train service in India.

APL IndiaLinx, its rail operations arm in the country, stacked 90 FEUs two high on a train that departed Mundra Port on the west coast on June 16 for an inland container rail terminal at Kishangarh, near Delhi, said a company statement.

The double-stacked train operation for the Mundra-Kishangarh followed the Indian Railways' recent decision to allow stacked train access along this rail corridor. The development was part of the rail authority's bigger project to provide a freight-dedicated network of railroads with double-stack train access connecting key gateway ports and major North Indian industrial centres before end 2016. APL IndiaLinx plans to expand its stacked train service network as more rail corridors are allowed double-stack access said the company.

"Double-stack trains are becoming an imperative in the rapidly-growing Indian market," said APL IndiaLinx managing director Amitabha Chaudhuri. "They help to ease congestion at ports where capacity constraint of rail corridors exists. Shippers also stand to enjoy improved connectivity between the key gateway ports and the major industrial centres in North India, and predictability, as we roll out stacked train services.”

APL Logistics provides international, integrated supply chain services in 53 countries, including both origin and destination services such as freight consolidation, warehousing and distribution management.

Established in 2006, APL IndiaLinx is one of the first privately-owned companies to be granted the most comprehensive rail operating licence in India. It owns and operates 18 weekly rail services between inland container rail terminals in the northern India and the gateway ports on India's west coast. The domestic rail operations arm of APL Logistics in India, APL IndiaLinx, reported a strong growth of 70 per cent in volume and 90 per cent in revenue in 2010.

source: Shipping Gazette / picture: google.com

NOL Signs Letters Of Intent To Build New Ships

NOL signed letters of intent to build 12 new container vessels. The ships, all to be built in South Korea, would include:

* Ten 14,000-TEU vessels to be constructed by Hyundai Samho Heavy Industries and

* Two 9,200-TEU vessels to be constructed by Daewoo Shipbuilding & Marine Engineering.

NOL also said it is upgrading a 2010 order placed with Daewoo for ten 8,400-TEU ships. These vessels will now be upgraded to 9,200-TEUs of capacity each and will employ new, more efficient design and technology.

The total consideration for the new vessels and upgrades would be about US$1.54 billion. The ships are scheduled for delivery in 2013 and 2014.

The 14,000-TEU ships would be NOL's largest and most fuel efficient. NOL said they will be deployed in its Asia-Europe Trade. The 9,200-TEU vessels will likely be employed in the Trans-Pacific Trade.

NOL said it is investing in new, larger vessels to reduce unit capital and operating costs, meet future growth needs and replace older and smaller chartered vessels that will be returned to their owners in the charter market.

When delivered, the new vessels will enable NOL's shipping line, APL, to provide more efficient, reliable service to customers. The ships will include features designed to conserve fuel and reduce environmental impacts.

NOL said the letters of intent are subject to contract signing with the shipbuilders.

source: logasiamag.com

APL Veteran - Bob Sappio -Steps Down

APL said that 29-year veteran Bob Sappio, head of the shipping line's PanAmerican Trades, will leave the company August 1 to remain in the San Francisco Bay Area.

Sappio has been the head of APL's Trans-Pacific Trade since 2003. He played a key role in establishing APL as the leader in the Trans-Pacific and in building its brand reputation for high-quality service in the industry, said Ron Widdows, CEO of parent company NOL Group.

"I've devoted my entire career to APL a company I have tremendous affection and respect for," said Sappio, who joined the container carrier in 1982. "But family priorities are most important, and I've made the decision to stay closer to home and remain in California where my family has established deep roots."

Sappio guided APL to a top market share position in the route between Asia and the US West Coast. He worked closely with key multinational customers and was APL's representative to carrier groups such as the Transpacific Stabilization Agreement. In 2010, Sappio represented the industry at congressional hearings in Washington, DC, on container shipping.

"Bob's contributions working closely with me on issues not only of importance to our company, but the industry and our customers, were invaluable," said Widdows. "He has helped us grow our business, improve our service and strengthen our relationships with many of the world's most important shippers. He leaves a lasting imprint on this company and parts with our thanks for a job well done."

NOL executive director Ng Yat Chung, who will become CEO when Widdows retires from his position at the end of 2011, said: "While we will miss Bob's passion and drive, we have built the best team in the business. Our focus on taking care of our customers' service needs at a level they have come to expect will continue to set APL apart in this important trade."

Sappio will be replaced in the Trans-Pacific by 22-year APL veteran Steve Schollaert, APL's executive vice president of intermodal strategy and former head of its Asia-Europe trade. Schollaert, who has a background in operations and was also responsible for APL's terminals, will be based in Phoenix. He will report to Liner Trade Management senior vice president Dave Appleton.

"We're pleased to select an executive with the broad experience that Steve has to head our Trans-Pacific trade," said APL president Eng Aik Meng. "I'm confident he will build on the legacy Bob Sappio leaves behind in this company and in the industry."

source: logasiamag.com / picture: google.com

NOL Reports US$10 Million Q1 Net Loss

NOL Group reported a first quarter 2011 net loss of US$10 million compared to a net loss of US$98 million in the same period last year.

NOL said first quarter 2011 revenue was US$2.4 billion, up 16 percent from a year ago. First quarter Core EBIT (earnings before interest and taxes) was US$13 million, compared to a Core EBIT loss of US$74 million in the same period last year.

"In spite of year-over-year volume growth, a softer than expected Lunar New Year period and rising fuel costs have interrupted our momentum," said NOL Group president and CEO Ronald D Widdows.

APL, the liner shipping business of NOL, reported first quarter 2011 revenue of US$2.1 billion. That was a 15 percent improvement over the same period a year ago.

APL announced a US$8 million Core EBIT loss compared to a US$89 million Core EBIT loss in the first quarter of 2010. Liner Shipping volume increased nine percent in the first quarter from a year ago. Average revenue per FEU (forty-foot equivalent unit) increased three percent. Vessel utilization in the first quarter was 92 percent.

"We lifted higher container volumes in the Asia-Europe and Intra-Asia trade lanes during the first quarter, and freight rates improved in the Trans-Pacific," said APL president Eng Aik Meng.

"But our emphasis must remain on operating efficiency, as well as slow-steaming our ships to conserve fuel and counteract the effect of rising fuel prices, which were 28 percent higher per metric ton in the first quarter of 2011 than they were in 2010.”

APL Logistics, NOL's supply chain management business, reported first quarter revenue of US$368 million, up 24 percent from a year ago. Core EBIT was up 40 percent in the quarter to US$21 million and the Core EBIT Margin was 5.7 percent, compared to 5.1 percent in the first quarter last year.

The improvements were attributed to higher volumes and recovering unit rates across logistics' various businesses. Contract logistics revenue increased 23 percent in the first quarter and international services revenue was up 26 percent.

"Our commercial performance continues to gain strength across multiple services which have been improving since the middle of last year," said APL Logistics president Jim McAdam.

"We've maintained a disciplined focus on cost of operations and are witnessing consistent growth in emerging markets - both in our international logistics business as well as in the contract logistics-automotive segments."

Market conditions remain uncertain. Increased operating costs - particularly related to fuel cost increases - and competitive pressure on rates are expected to continue for the near term. Should these conditions persist, results will be negatively impacted. Its focus remains on operating efficiency, cost reduction and high vessel utilization.

source: logasiamag.co/picture: google.com

Neptune Orient Lines to switch to low sulphur fuel in Singapore

CONTAINER shipping and logistics group NOL has announced that its vessels will start using cleaner burning, low sulphur fuel at ports in Singapore, where the company is based.

The move to convert to marine gas oil while at berth will affect all 80 of the vessels operated by APL, the group's container shipping line, which make more than 900 port calls in the Lion City annually.

APL president Eng Aik Meng said: "We feel a responsibility to manage the environmental impact of global trade.”

The decision is expected to reduce sulphur oxide emissions from the carrier's ships by almost 90 per cent. "Sulphur oxides are considered a key component of acid rain. Ash and particulate matter emissions could be reduced by 80 per cent to 90 per cent," a statement from the parent group said.

Said Maritime and Port Authority chief Lam Yi Young: "We greatly welcome APL's decision to switch to using low sulphur fuel in Singapore and hope that more shipping companies will follow APL's lead in doing so.”

The switch to cleaner burning fuel is said to have beaten a deadline set by the International Maritime Organisation that has been adopted by Singapore so calls for the sulphur content of marine fuel be reduced to 3.5 per cent in 2012 and to 0.5 per cent by 2020. The marine gas oil the container shipping line will use in Singapore has an average sulphur content of 0.25 per cent, the statement said.

According to the company, it began its voluntary fuel switching programme in Los Angeles and Seattle in 2007. It has since extended the initiative to Vancouver, Hong Kong, New York and New Jersey.

source: Shippingazette.com / picture: google.com