Copyright 2002 Commonwealth Business Media  
Journal of Commerce - JoC Week
September 16, 2002, Monday
SECTION: THE WEEK; Pg. 10

LENGTH: 908 words

HEADLINE: THE WEEK

BODY:
Neptune Orient Reports Loss: Neptune Orient Lines, the Singapore-based parent company of APL Ltd., said it had a loss of $151.4 million for the six months ending June 30, on revenue of $2.2 billion. Despite what it said was a brightening outlook for the industry, NOL said it expected its liner and logistics subsidiaries to have losses for the full year. Like many carriers, APL is reporting strong demand for transportation -- it said its liner volumes were 12 percent higher than last year -- but prices are moving in the opposite direction. Flemming Jacobs, NOL chief executive, said that although capacity utilization is high, "with the current rates, this will not be enough to translate into profitability for the liner activities in the second half of 2002." He said cost-cutting has been unable to offset weak rates. The company said revenue for the first half of the year was 5 percent lower than the $2.3 billion it recorded in the first half of 2001, when NOL posted a $10.6 million profit. A.P. Moller Buys Torm West Africa Service: Denmark's Torm has agreed to sell its liner business to the A.P. Moller Group, the Danish-based parent of Maersk Sealand. Torm, already the world's largest product-tanker operator, wants to focus on the product-tanker and dry-bulk business. A.P. Moller is already a big operator in Africa, having acquired South Africa's Safmarine in 1999. Torm operates eight ships that carry both containers and breakbulk cargo between the United States and West Africa.

Funding Urged For TEA-21: Reauthorization of the Transportation Equity Act for the 21st century is needed, witnesses told a Senate committee hearing last week. Michael Huerta, testifying on behalf of the Coalition for America's Gateways and Trade Corridors, urged Congress to appropriate at least $2 billion in annual funding for the borders and corridors programs to meet the freight infrastructure needs related to international cargo. He said the funding for the program has fallen short of the amount needed to adequately support development and improvement of freight transportation and intermodal connectors.

KLM Cargo Delays Adoption Of Pricing Formula: Shippers praised a decision last week by KLM to hold off on a proposal by the International Air Transport Association to change the way in which freight rates are formulated for low-density cargo. The new IATA formula, which would change the ratio for low-weight cargo charged on a volume basis from 6,000 cubic centimeters equaling one kilogram to 5,000 cubic centimeters, could raise airfreight rates on commodities ranging from apparel to semiconductors as much as 20 percent, depending on how the goods are packaged.

DHL Says It Meets US-Citizen Requirement: DHL Airways Inc., in a filing with the Transportation Department, reiterated its position that it continues to satisfy the statutory requirements for U.S. citizenship applicable to airlines. Under federal law, a domestic airline must have at least 75 percent of its voting interest owned or controlled by U.S. citizens and at least two-thirds of the airline's board and other managing officers must be U.S. citizens. The DOT has previously confirmed that DHL Airways satisfies each of these and other applicable requirements, DHL said. DHL Airways' largest shareholder is William A. Robinson, a private investor. Robinson, a U.S. citizen, controls 75 percent of the voting stock and appoints three-quarters of the airline's board of directors, each of whom must be citizens of the U.S. Separately, DHL said it is expanding its global service parts logistics network in the United States and Canada with the opening of a new express logistics center in San Francisco.

Danzas Profit Rises On Lower Revenue: Danzas Group, the Basel-based logistics subsidiary of Deutsche Post World Net, said its earnings before interest, taxes and amortization rose 8.1 percent to $78 million during the first half of the year. Sales fell 5.8 percent to $4.32 billion. "We did very well in a difficult market," said Renato Chiavi, the company's chief executive. The group said it increased its worldwide market share in airfreight exports to 6.2 percent in 2001 from 6 percent the previous year.

Where Uncle Sam's Transportation Dollar Goes: The federal government spent an average of $3.9 billion on the marine transportation system between fiscal 1999 and 2001, compared with $10 billion on aviation and $25 billion on highways, according to a General Accounting Office report released last week. The GAO, the accounting and research arm of Congress, notes that user fees support highway and aviation infrastructure where the federal government draws on general revenue to pay for maritime infrastructure improvements. Customs duties account for a large part of the revenue collected through the marine transportation system. About three-quarters of all customs duties are assessed on ocean cargo.

Lykes Upgrades Africa Service: Lykes Lines, part of CP Ships, has upgraded its multipurpose-ship service between Africa and North America, adding the Dominican Republic's Port of Rio Haina to the carrier's East Coast Loop service between North America and Africa. It also has signed a deal with Global Container Lines, a regional shipping line, to carry cargo between South Africa and East African ports. A new agent, African Liner Agencies Ltd., has been appointed in East Africa.

LOAD-DATE: September 16, 2002