Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

Welcome to Freight Dawg!

The Logistics Blawg!

My name is Eric J. Joiner, Jr.  I've been fortunate to work in the logistics and supply chain field for a quarter of a century. I work with a large 3PL and logistics integrator in a global sales role. I am blessed to work in an industry that I love!

Freight Dawg topics range from leadership, careers, green supply chains, supply chain technology, most transportation modes, passenger airlines, as well as logistics and supply chain strategy.  I'm not above the occasional tantrum on the trials and tribulations of my weekly air travel either!  This is a truly multi-modal blog.  Shippers, consignees and carriers are all covered here. 

The goal for Freightdawg.com is to provide industry level depth of content and perspective to logistics and supply chain professionals and interested parties. 

Your feedback and participation are welcomed.

Please comment on what you read here!

Eric

Happy Memorial Day 2012

To a lot of Americans,  Memorial Day is a nice day off from work.  A chance to grill out and hit the swimming pool for a nice day with the family.   To other families though, its a chance to remember the painful loss and celebration of life of fallen US war heroes.    I wish to just remind us all that this is the real reason for the day off.  Explain it to your children please.   We borrow the environment from our children, but their freedom was paid for in the blood of their forebearers. 

This is a link to an article I wrote some time ago about the transportation of the bodies of those fallen in war.  Its an emotional article to read.  It was my honor to write it.

Eric

Confederate Ironclad blocks Savannah Dredging.

The CSS Georgia was scuttled to prevent General Sherman and the US Navy from entering Savannah by sea in 1864. Now the same ship still defends the port.  This time preventing modern containerships from entering the port. 

As the Panama Canal is expanded to allow larger container vessels through the multiple locks transiting the Panama Canal, so must the ports on the US East Coast be dredged to accommodate the larger ships that will come calling.  

The US Army Corps of Engineers will now look to recover the CSS Georgia's relic, or what remains of her, so that commerce can take place. 

Technically the Georgia is a war grave and an enemy combatant vessel belonging to the US Navy.   The Navy is normally very ornery regarding reclamation of these sites, however, given the commercial importance of the Port of Savannah,  the Georgia will be resurrected in whatever form remains of her, and those remains sent for study or museum display as appropriate.

Now if the Corps of Engineers could just find that pesky thermonuclear bomb that fell out of the B-47 into the waters in the same area in the 1950's...that would be Schweet!

By RUSS BYNUM The Associated Press SAVANNAH, GA. — Before government engineers can deepen one of the nation's busiest seaports to accommodate future trade, they first need to remove a $14 million obstacle from the past — a Confederate warship rotting on the Savannah River bottom for nearly 150 years. Confederate troops scuttled the ironclad CSS Georgia to prevent its capture by Gen. William T. Sherman when his Union troops took Savannah in December 1864. It's been on the river bottom ever since. Now, the Civil War shipwreck sits in the way of a government agency's $653 million plan to deepen the waterway that links the nation's fourth-busiest container port to the Atlantic Ocean. The ship's remains are considered so historically significant that dredging the river is prohibited within 50 feet of the wreckage. So the Army Corps of Engineers plans to raise and preserve what's left of the CSS Georgia. The agency's final report on the project last month estimated the cost to taxpayers at $14 million. The work could start next year on what's sure to be a painstaking effort. And leaving the shipwreck in place is not an option: Officials say the harbor must be deepened to accommodate supersize cargo ships coming through an expanded Panama Canal in 2014 — ships that will bring valuable revenue to the state and would otherwise go to other ports. Underwater surveys show two large chunks of the ship's iron-armored siding have survived, the largest being 68 feet long and 24 feet tall. Raising them intact will be a priority. Researchers also spotted three cannons on the riverbed, an intact propeller and other pieces of the warship's steam engines. And there's smaller debris scattered across the site that could yield unexpected treasures, requiring careful sifting beneath 40 feet of water. "We don't really have an idea of what's in the debris field," said Julie Morgan, a government archaeologist with the Army Corps. "There could be some personal items. People left the ship in a big hurry. Who's to say what was on board when the Georgia went down."  Also likely to slow the job: finding and gently removing cannonballs and other explosive projectiles that, according to Army Corps experts, could still potentially detonate. That's a massive effort for a warship that went down in Civil War history as an ironclad flop. The Civil War ushered in the era of armored warships. In Savannah, a Ladies Gunboat Association raised $115,000 to build such a ship to protect the city. The 120-foot-long CSS Georgia had armor forged from railroad iron, but its engines proved too weak to propel the ship's 1,200-ton frame against river currents. The ship was anchored on the riverside at Fort Jackson as a floating gun battery. Ultimately the Georgia was scuttled by its own crew without having ever fired a shot in combat. "I would say it was an utter failure," said Ken Johnston, executive director of the National Civil War Naval Museum in Columbus, Ga., who says the shipwreck nonetheless has great historical value. "It has very clearly become a symbol for why things went wrong for the Confederate naval effort." As a homespun war machine assembled by workers who likely had never built a ship before, the CSS Georgia represents the South's lack of an industrial base, Johnston said. The North, by contrast, was teeming with both factories and laborers skilled at shipbuilding. They churned out a superior naval fleet that enabled the Union to successfully cut off waterways used to supply Confederate forces. Despite its functional failures, the shipwreck's historical significance was cemented in 1987 when it won a place on the National Register of Historic Places, the official listing of treasured sites and buildings from America's past. That gave the Georgia a measure of protection — dredging near the shipwreck was prohibited. Still, a great deal of damage had already been done. The last detailed survey of the ship in 2003 found it in pieces and its hull apparently disintegrated. Erosion had taken a large toll, and telltale marks showed dredging machinery had already chewed into the wreckage. Salvaging the remains will likely move slowly. Divers will need to divide the site into a grid to search for artifacts and record the locations of what they find. The large sections or armored siding will likely need to be cradled gently by a web of metal beams to raise them to the surface intact, said Gordon Watts, an underwater archaeologist who helped lead the 2003 survey of the shipwreck. The Army Corps' report also notes special care will be needed find and dispose of any cannonballs and other explosive projectiles remaining on the riverbed. "If there is black powder that's 150 years old, and if it is dry, then the stability of it has deteriorated," Watts said. "You'd want to be as careful as humanly possible in recovering the stuff." Once the remains of the Georgia are removed from the river and preserved by experts, the Army Corps will have to decide who gets the spoils. Morgan said ultimately the plan is to put the warship's artifacts on public display. But which museum or agency will get custody of them has yet to be determined. Right now the Confederate shipwreck legally belongs to the U.S. Navy. More than 150 years after the Civil War began, the CSS Georgia is still officially classified as a captured enemy vessel. ___ Online: U.S. Army Corps of Engineers' CSS Georgia page, http://www.sas.usace.army.mil/CSS/

Well, That Didn't Last Long. AFL Suspends US Short-Sea Ops

Rudy Mack was the CEO of Hapag Lloyd in the US for several years in the late 90's.  He is a well known and well respected liner veteran whose expertise resonates with investors and shippers alike.  So when he and some partners founded American Feeder Lines, this looked like it might work.  AFL was and is a container line whose business is the movement of intercoastal container shipments.   This is called "short sea" shipping and is quite common in Europe and Asia.   The service is relatively unheard of in the US.  Trucks and railroads serve the US market. 

Mack's idea was to move containers throughout New England, US East Coast and Gulf, taking advantage of costs that would be cheaper than trucking and leveraging an under served market.  Over the years, deep sea carriers have stopped calling at Boston and in the olden Days,  Hapag Lloyd, Mack's old carrier employer even ran its own ships into Portsmouth, New Hampshire.    The thought process with AFL I am sure was to serve that same market as well as the whole US eastern seaboard.   The benefit would be to both the shipper and consignee community and to the blue water ocean carriers who now would have a cheaper way to serve an important market with out a direct call by the main line vessels.

American Feeder Lines operated with US flag ships as required by US Law.  The Jones Act says that American domestic trade must use American built ships and use US crews.  Both of those things are expensive but the idea was a good one.   All I can guess is that the funds raised to run the fleet ran out before the lane density was enough to sustain the business.    I hope AFL finds new funding because the market is there, ranging from US intercoastal traffic to the US Military.

Clipped from the Portland (Maine) Press Herald. Shippers lose Portland-based container line American Feeder Lines closes its Port of Portland service, citing a lack of volume and a loss of investment. By Tux Turkel tturkel@mainetoday.com Staff Writer PORTLAND — The Port of Portland has lost scheduled container shipping again, nine months after the start of weekly service connecting Boston, Portland and Halifax, Nova Scotia. New York-based American Feeder Lines, which handled everything from L.L. Bean products to grain alcohol headed for a Maine distillery, announced late last week that it had suspended operations because of a lack of volume and a loss of private investment, then said it had closed. "We're very disappointed," said Rudy Mack, the company's chief operating officer. "We thought the timing was right." The end of the service is a blow to Portland, which is rebuilding the International Marine Terminal and expanding cargo handling capacity from 50 containers a week to about 200 a week. The $5 million, federally funded project will be completed this summer. Exact figures on how many containers were moving through the terminal recently were not immediately available. In 2007, city officials said the facility handled 4,077 containers. American Feeder Lines' demise represents a financial loss for the Maine Port Authority. In early March, the authority approved a $200,000 loan to the company to help pay for its operations. The money came from lease and dockage revenue, not tax dollars. Boston and Halifax made similar loans. That investment now appears to be gone. Another operator could resume the service from Halifax, an important market connection to New England. The Port of Portland is being used by several Maine shippers. White Rock Distilleries in Lewiston, L.L. Bean in Freeport, Schnitzer Steel Industries in Auburn and a half-dozen paper mills, including Sappi's Westbrook and Somerset mills, have been importing or exporting goods through Portland and Halifax. "There's a lot of interest," said John Henshaw, executive director of the Maine Port Authority. "This is a lost opportunity, but it's not the last opportunity." The Port of Portland has long had a strong commercial link with Halifax, which is home to several major shipping lines. Portland lost weekly container service to Halifax in 2008, when another company pulled out. A barge that took wood pulp to New York stopped calling in 2009. The arrival of American Feeder Lines was a hopeful sign that Portland could again have stable and reliable freight service. It also supported as many as 20 longshoremen's positions, for unloading cargo and operating the marine terminal. Boston, Portland and Halifax formed the first leg of a new venture meant to link a string of Atlantic ports from Miami to Portland. American Feeder Lines had a hub-and-spoke network, in which imported cargo from large container vessels was shuttled to smaller ports, such as Portland, on a fleet of feeder ships. For exports, the smaller ships fed the big vessels. The so-called short-sea container service is a common way to move freight in other countries, but not in the United States, where it faces strong competition from trucking and railroads. American Feeder Lines hoped it could buck that trend. It ultimately wanted to build a fleet of environmentally friendly container ships that would take freight traffic off crowded East Coast highways. The company began operating last summer with a chartered vessel, the AFL New England. Mack said Tuesday that he and his partners put about $3 million into the venture, and received $2 million from investors. The service wasn't generating enough cash flow to continue, he said. It also was hurt when diesel fuel prices soared this year to record levels. Henshaw noted that the service was starting from scratch in Portland and it took time to sign up shippers. "To my mind, it took longer than investors thought it would, but it was moving in the right direction," he said. Maine shippers were still waiting Tuesday for official word about the future of the service. Harold Jones, traffic manager for White Rock Distilleries in Lewiston, imported tanks of grain alcohol from France through Halifax to Portland. It was more convenient and less costly to truck the alcohol from Portland than Boston, where it was shipped before the cargo service began. "We're very sorry to see the service suspended and hope it can resume," he said. "I'm not giving up on the port." If another operator doesn't come forward, Jones said he will use Boston again for imports. The AFL New England is anchored in Halifax Harbor, as lawyers and creditors decide the future of the ship and its cargo. It's unclear whether it could be leased to another operator. The province of Nova Scotia has expressed strong interest in seeing the service continue. A few weeks ago, it approved a $500,000 loan guarantee for American Feeder Lines, aimed at attracting more New England-bound container business for the Port of Halifax. That loan was never completed, according to Canadian media reports. The $200,000 loan by the Maine Port Authority was made in conjunction with Boston and Halifax, in an attempt to maintain the fledgling service in anticipation of more shippers. "We obviously were concerned about the slowness of the service growing," Henshaw said. He said he plans to work with interested parties to try to save container service via Halifax. He also will explore the resumption of shipping to New York Harbor, with a federal maritime official who will visit Maine this week. The Marine Highway Program aims to reduce air pollution and truck traffic by moving freight off highways and onto nearby sea corridors.

DAL Buys JAL Jets

I flew from Fort Lauderdale to Atlanta today.  In doing so, I recognized an "old friend".   Delta some years ago bought a series of B757-200 passenger jets from China Southern Airlines.   These airplanes have steel brakes.  When the pilot activates them, they are extremely noisy.  Passengers routinely joke about the aircraft needing a shot of WD-40 lubricant!   I mentioned this to the captain of the flight today and surprisingly he didn't know this bit of information. 

Guess that makes me a maximum aviation nerd.    I know this stuff for some reason...wife yells at me for not knowing what bread to buy, but I can tell you history on N900PC for Delta...  (Flew to Aruba on vacation on that one, and it was one of the steel brake Shanghai ladies.)

Good airplanes, just configured differently.   I am always interested in these planes because their varied history is so different than that of a plane that an airline gets straight from the manufacturer and flies until retired.  

These old girls have worn different paint and served different passengers.   This is pretty common with freighter aircraft that have lived glamorous passenger lives previously.   DC-8's, DC-10's,  B747's,  B757 and B767's all have done that.    So have all the old propliners.  When I see pictures of aircraft in the various boneyards used to scrap commercial planes, I always wonder what stories they could tell. 

Its not unusual for a Boeing airplane to get sent off to Israel or some other place to get refitted with a cargo door and a hardened deck for cargo.  DHL bought 11 Delta Boeing 767-200's a couple of years ago and did this very thing.

The article below from the Atlanta Journal Constitution mentions Delta adding several old MD-90's to their fleet from Japan Airlines.   More old girls in new paint.  I wonder what eccentricities they will have?

Delta buying more jets from Japan Airlines By Kelly Yamanouchi The Atlanta Journal-Constitution Delta Air Lines said it bought seven more MD-90 jets from Japan Airlines to replace older planes. The purchase is in addition to the nine MD-90s Delta bought from Japan Airlines last year. Delta said it has acquired 49 MD-90s in the past three years, and with the latest purchases it will eventually have a total of 65. In the face of high fuel prices and an uncertain economy, Delta said it's part of a strategy to use the most efficient aircraft whenever possible.

Fundamental Shift: Delta buys a Refinery.

I am traveling this week, so this will be quick, but I was both thrilled and amazed to see that Delta Airlines decided to do something very adventureous for an airline.  They decided to become a conglomerate.  

My hometown airline in Atlanta decided that it was more important to seek vertical integration with a key element of their supply chain rather than to remain a "pure play" to the analysts who measure airline stocks.

Delta bought an oil refinery.  Delta got a uniquely great deal from ConcocoPhillips on a facility they were looking at either retrenching or shutting down in Trainer, Pennsylvania.  Instead, that plant and its employees got a dedicated customer who will consume 100 percent of their output for the foreseeable future.  If DAL buys a chocolate factory in Hershey, PA,  DAL CEO Richard Anderson will be elected Governor in Pennsylvania. 

Anderson compared the $150 million price tag to buying one new widebody aircraft.  The investment dollars are similar, but the return is much different. 

What really (really) amazes me is that I vividly remember a Delta flight in 2007 where I and other passengers were waiting to deplane a flight and the captain was standing outside the flight deck and openly bitching about Delta management.   It seems that during that particular week the DAL CFO had decided it was a good idea to sell all Deltas fuel hedges in order to make payroll.   Delta was buying fuel at about $80 dollars a barrel (shock!!) vs. Southwest Airlines, who has always been a great hedger...at $26.00 bucks a barrel.    

Now that Southwest Airlines has a happy home in ATLANTA...thanks to them buying Airtran,  this is a great strategy from Delta based on an initial read of the tea leaves.

Now.  Heres a bigger question.   What about UPS???     The folks on the north side of Atlanta have a heck of a big airline of their own, and a ground network that is plenty thirsty.    While the UPsters have just thrown a wad of cash at TNT in Europe, they are still cash rich.    Would it not be a great integration play to do something similar to what Delta did and buy a refinery that produced both Jet petroleum and Diesel?    Purple beware.

Ok, now lets get it REAL big.   What if Delta and UPS bought petroleum assets?  They do not compete.  But they could cooperate.   Economies of scale could insue.  If a major carrier wants to compete with regional discount carriers, getting a leg up on fundamental costs like fuel will be critical.    

Now wait...what if Lufthansa and DHL did the same in Europe???    They partner already... what if they did the same thing in Asia?   This would be both an offensive and defensive strategy. 

Enough crazy talk.  I am going to bed.

 Eric

You can't get there from here / unless you use DHL

Charles Brewer used to be a senior executive with DHL in the United States.  He lead US sales a couple of years ago before taking on a new role in Africa.  Before serving in the US, Charles was country manager in Malaysia. 

As a company with a presence in 220 countries, an ex-pat executive is likely to find himself in a far off place from time to time.  If you like that kind of thing, you can have a career doing that.  

The article below, which is clipped from Business Live in South Africa, outlines the challenges in moving goods in Africa. 

Scarcity of flights pushes up freight costs Because of bad road infrastructure and long waiting times at borders posts, 90% of intra-Africa freight is transported by air. Charles Brewer, MD of the sub-Saharan African operations of DHL Express, says this is why logistics in Africa can be as much as seven times more expensive than in Asia-Pacific, Europe or the Americas. Using the example of Nigeria, DHL Express's second-largest market in Africa, Brewer says the company often moves freight between Lagos and Port Harcourt, about the same distance as between Johannesburg and Bloemfontein. By road, the transit time between the cities can be delayed significantly. Vehicles are at risk of being robbed. "In that scenario, we are forced to look at getting the freight off the ground and into the air, although the cost can be up to three times higher." The reliance on airlines to move goods means recent investments by airlines in Africa is vital, he says. Although at least six African airlines suspended business in the last year, airlines like Kenyan Airways and Ethiopian Airlines recently announced significant investments in their fleets. Airlines like Etihad, Emirates and Qatar, from the Middle East, are also investing in African routes, which means African trade is less dependent on European carriers. "These investments come for the same reason that we and many other multinationals are here. Africa offers huge opportunities. From a logistics perspective, trade is growing enormously." But the scarcity of commercial flights still presents a challenge to companies like DHL Express. "Just over 12% of cities are served by just one flight a week, and over 50% by fewer than five flights a week. Only three cities out of 100 are served by 50 or more flights a week." This contributes to the high cost of air travel and moving freight between African countries compared with flying from South Africa to many other parts of the world. The challenges to intra-Africa trade are partly to blame for the fact that less than 30% of trade by African businesses stay in Africa. In Europe and Asia-Pacific, more than 70% stays on the continent. "That clearly shows you a company that is located in, for example, Tanzania finds it more difficult to trade within its own region than to trade with the UK or Germany, or the US or China or India. "But it is improving from a few years ago. When we first started here, we were the ones knocking on the doors of customs officials and governments and saying the [trade] environment can be simpler. Today, it quite often is the customs authorities in the countries who come to talk to us and ask us to help them to be best in class. That is very encouraging."

Related Articles from the same source.

• African countries urged to ease trade within the continent
• DHL focuses on intra-Africa trade
• DHL predicts Africa energy boom