ANOTHER round of freight rate declines emerged last week as Asia-US west coast rates fell 3.2 per cent to US$2,510 per FEU, while rates to the US east coast dipped 2.4 per cent to $3,454 per FEU, according to the Shanghai Containerised Freight Index (SCFI).

But it was on the Asia-Europe and Asia-Mediterranean trades where the biggest falls were recorded.



The average spot rate on the Asia-Europe trade dropped 3.5 per cent week to week to $1,074 per TEU, whereas the average rate on the Mediterranean route plunged 4.8 per cent to $1,076 per TEU.



Across all trades covered by the index the SCFI contracted 2.3 per cent to 1,174.80 points.

THE Port of Antwerp, Europe's second largest, posted a year-on-year 0.5 per cent decrease in container volume to 6,517,956 TEU for the first nine months of 2012.

According to the port, its box volumes were better than other sectors including breakbulk traffic which steeply reversed to 16.1 per cent drop due to the economic climate.



Rival Rotterdam recorded a decline of 1.6 per cent in the first six months of the year and is yet to report its first nine-month's traffic.

FREIGHT forwarders are warning the industry to exercise caution in shipping goods to Iran for fear of US$10 million fines and 10-30 year imprisonment for sanction busting.

The warning, published in the British International Freight Association (BIFA) newsletter, comes after Maersk Line was fined $3 million two years ago for breaking US sanctions for shipping to Iran and Sudan. The US alleged that between January 2003 and October 2007 Maersk moved 4,714 shipments on a US-flagged vessels to or from Iran or Sudan.



A report by London Loadstar highlighted that the sanctions against Iran are tightening. In August the US approved new regulations against the Iranian oil industry, while European Union ministers are pushing for further sanctions on financial institutions, the energy sector and maritime shipping.



"As an agent I would be concerned if I had a US office and worked with Iran, as the US can be quite brutal," one forwarder said. "Even raising a legitimate question could get you into further trouble - you could be seen as a saboteur. But then again the EU and the UN also have sanctions on Iran, so forwarders are probably liable even without a US office."



Andrew Robins, vice president customer service for the WCA Family of forwarders, revealed a WCA member in Germany had recently flown some ship spares into Dubai, to be reloaded onto a vessel. "It turns out the vessel was under an Iranian flag, and UPS has subsequently held the shipment, and given our member a number in the US to call, and the whole thing is now going nowhere.



"So there are many risks at this time dealing with Iran, not just on what is the actual shipment. Some countries, without warning, can seize shipments. And if the freight has not been paid for, the agent will be obliged to pay the carrier but will have a hard time getting his money from the customer."



The laws vary from country to country which complicates matters further. "One of the problems is that there is a difference between UK and US laws," said another global forwarder based in London, with a US office. "We found ourselves booked to handle cargo inbound from the US, repackaged in the UK and then on to Iran."



The forwarder said he contacted the UK Foreign Office who said that if the consignee was approved, it was acceptable.



The forwarder added: "We are having to refuse cargo that is legal in the UK because we have a US office. I want to warn other forwarders who might not know about this."



US regulations state: "With certain exceptions, foreign persons who are not US persons are prohibited from re-exporting sensitive US-origin goods, technology or services to Iran or the Government of Iran. Foreign persons involved in such re-exports may be placed on the US Commerce Department's Export Denial Orders list."



According to the report, much of the illegal trade from the US to Iran goes through Dubai.



A spokesman for Emirates, which flies to Tehran, said: "Our systems are updated with details provided by the UN on the names and contact details of any parties affected by an embargo to ensure that shipments to them cannot be booked or made.



"In addition, our SkyChain system has in-built intelligence to alert us to any variations such as name changes. Should we receive such an alert, our team will always re-confirm details before permitting any booking or shipment."

SINGAPORE's Neptune Orient Lines (NOL) chairman Kwa Chong Seng told the Singapore International Bunkering Conference that cost control rather than growth must be the focus of the container shipping industry in years to come.

Mr Kwa expected supply would significantly exceed demand for years, resulting in depressed container rates and higher capital expenditure.



"The current model is simply not sustainable. We need to change our focus, and efficiency has to be the watchword," said Mr Kwa, whose NOL's principal holding is APL, the group's container shipping line.



A new business model must emerge centred on cutting fuel demand per TEU, he said. The ship supply bulge had been "driven by over-ordering of large ships, and many are being delivered at the time the industry needs them least".



Nonetheless, he said, the trend towards larger and more efficient newbuildings was "irreversible".



Noting that NOL has ordered 34 newbuildings, Mr Kwa said: "This is not additional capacity, but replaces old and inefficient charters. This will help us reset our cost base."



He said NOL was now focusing on standardising operating procedures for masters and on closer collaboration with ports to achieve just-in-time service. Another area of concentration is slow steaming, down to 18 knots from 22 by maintaining efficiency through the use of the latest purpose-built engines and the application of lubricants.



Mr Kwa said financing for smaller container lines was an increasing challenge, though Chinese and South Korean lenders are ready to take positions if ships are built in their yards.

GLOBAL container capacity fell slightly during the third quarter, showing the deepest drop eastbound from Europe to Asia at 3.8 per cent to 337,946 TEU while westbound fared better at 1.6 per cent decline to 98,774 TEU.

The largest market share was by CKYH Alliance on eastbound and at 27.8 per cent and 30.5 per cent for the west coast of North America. On the Asia-west coast trade, CKYH holds double the weekly allocated capacity followed by the New World Alliance at two and half times more than Grand Alliance and more than triple that of Evergreen, MSC and Maersk over the three-month period.



Overall transatlantic capacity westbound were down 1.8 per cent and eastbound by 1.6 per cent. For CKYH Alliance that total eastbound transpacific share was down from 28.9 per cent on July 1 attributed to loss of share on all-water service to the North American east coast.



According to ComPair's BlueWater Reporting service, the westbound Asia-Europe lane had slight dominance by Maersk clawing further market share capacity at 21.7 per cent, CKYH carriers at 19.3 per cent, MSC at 15.2 per cent and G6 Alliance and CMA CGM at 14.2 per cent and 10.2 per cent respectively.



Maersk remained at similar market share for Asia-northern Europe and Asia-Mediterranean capacity while MSC was able to take a larger share on Asia-Mediterranean trade at 21.2 per cent capacity, Asia-Northern Europe capacity of 12.1 per cent. G6 Alliance was at 19.2 per cent and 4.3 per cent for north Asia-north Europe and Asia-Med respectively.



ComPair publishes quarterly World Liner Supply Reports that show the capacity and frequency on 30 individual lanes operating between Asia, Europe, North America and South America.

THE Union Pacific Railroad (UP) posted a 10 per cent third quarter net profit increase to US$1 billion year on year drawn on $5.3 billion in revenue, a rise of five per cent.

The robust third quarter results were supported by solid pricing gains and revenue growth in chemicals (17 per cent), automotive (15 per cent) and intermodal (eight per cent) to offset a five per cent decline in coal freight revenues and weakening results in steel and scrap metal.



The Omaha-based railway, the biggest freight carrier in the country, also posted a quarterly freight revenue increase of four per cent compared to same third quarter 2011 driven by core pricing gains of five per cent. Its average revenue per intermodal container or trailer was $1,192, an increase of seven per cent same period 2011.



Despite economic uncertainty, "we achieved solid core pricing gains, managed our network efficiently and delivered on the benefits of our diverse franchise with growth in other markets," said UP chief executive Jack Koraleski.

SINGAPORE's non-oil domestic exports (NODX) declined by 3.4 per cent in September 2012 compared to a year earlier, following the 10.7 per cent decrease in the previous month, due to a contraction in electronic NODX which outweighed the rise in non-electronic NODX.

On a three-month moving average domestic exports shrunk by 3.1 per cent in last month, in contrast to the marginal 0.1 per cent increase in August.



On a year-on-year basis, NODX to all of the top 10 markets, except Taiwan, Japan, China and Indonesia, fell in September. The top three contributors to the contraction in September were the European Union, Hong Kong and Malaysia, reports Singapore International Enterprise agency.



Year on year, re-exports decreased 0.3 per cent in September, in contrast to the 3.2 per cent increase in August, which was attributed to electronic re-exports outweighing an expansion in non-electronic re-exports.



Non-oil retained imports of intermediate goods (NORI) decreased by S$733 million from S$5.8 billion in August to reach S$5.09 billion (US$4.2 billion) in September.



Year on year, total trade contracted by 3.7 per cent in September, following the 7.1 per cent decrease in August. Total exports declined by 6.4 per cent in September, after contracting by six per cent the previous month. Total imports fell 0.5 per cent, following an 8.3 per cent decline the month before.



Oil domestic exports decreased by 17.3 per cent in September, after the preceding month's 12.4 per cent contraction. The decline was mainly due to lower sales to Hong Kong (-25.9 per cent), China (-27.6 per cent) and Indonesia (-19.4 per cent).

THE DB SCHENKERsmartbox service for monitoring global freight transports has been improved to allow customers to choose from five options depending on their needs.

"We have observed that high-value products are increasingly being transported by container around the world on all of the important routes," said Diederick de Vroet, head of Global Ocean Freight at DB Schenker Logistics.



"Our customers are therefore increasingly interested in additional security and quality assurance for their transports using state-of-the-art visibility solutions," he said.



DB SCHENKERsmartbox premium uses GPS coordinates to let customers monitor their consignments on the Internet in real time. Parameters such as temperature, humidity, G-force, movement, vibration and inclination are checked constantly.



The technology monitors the route across modes of transportation using geofencing, a telematics solution in which a container is only permitted to move within an area that has been defined in advance. The device reports any attempt to open the container.



The new Advanced Air & Ocean Tracking service also lets customers track each unit individually in real time.

AFRICA is posting the biggest GDP growth gains in the world and supply chains are in danger of being overwhelmed, says Barloworld Logistics CEO Steve Ford.

While western economies' GDP gains lag, Angola, had the world's fastest growing economy last year, according to the IMF, and Mozambique was the fastest growing non-oil producing country. Despite the political trouble in Zimbabwe, its Beitbridge border crossing is the busiest in Africa by cargo volume.



Six of the world's 10 fastest growing economies are in sub-Saharan Africa, Mr Ford noted.



In Africa, Supply Chain Management (SCM) - notwithstanding creaking infrastructure and interminable red tape - the continent is seeing the deployment of the latest technology, thereby achieving a holistic approach to cost management and the freeing up of value, he said.



Said Mr Ford: "In revenue terms, an immediate impact can be seen on sales, through the increase in service levels, reduction of out of stocks and the creation of more loyal customers. Operating costs, similarly, reduce through the reduction of the cost of holding inventory, and the reduction of write-offs due to obsolete stock Operational cost savings are also realised in direct distribution costs as these are optimised, as well as the minimising of production downtime."



With regards to risk aversion, he notes that BCI Supply Chain Resilience's survey of 559 respondents from 62 countries last year found that at least 85 per cent had experienced at least one disruptive incident in 2011, and only eight per cent reported all of their key suppliers had business continuity programmes in place.



"In an industry with fast inventory turns such as retail, companies without risk plans can be faced with empty shelves from harsh weather conditions, strikes and increasingly - currency volatility," he said.



"Optimising inventory planning now requires an unprecedented degree of flexibility, while retaining the visibility provided by maturing software solutions. Business intelligence solutions need to provide the ability to have a seamless view of what is happening across the entire supply chain network - a centralised system of command and control. Although technology is evolving to make a single view of the supply chain possible, the challenge of disparate parts and silo'ed systems remains."

TURKEY has admitted that the Syrian-bound passenger plane it seized while it flew from Moscow to Damascus, was not carrying illegal arms or contraband, according to the Russian news agency RIA-Novosti.

But Turkey claimed the transportation notification procedure of the legal cargo of radar equipment was unclear stating that it had "dual purpose" potential.



A Russian Foreign Ministry spokesman said that its Turkish partners had retracted its initial allegations of Russian-made ammunition onboard which forced the civilian aircraft to land, an Airbus A320 for a inspection that lasted five hours.



Syria's foreign ministry stood by its claims that the jet held no illegal items on board and Moscow will request the return of the equipment which it maintains are for defensive equipment and not to be used against civilians, in accordance to international law.

A WHITE HOUSE-led review of security risks posed by Chinese telecom firm Huawei Technologies found no clear evidence that the company had spied for China, Reuters reported, citing two people familiar with the probe.

But the review concluded that Huawei's systems were potentially vulnerable to hacking. The White House inquiry asked detailed questions of nearly 1,000 telecom equipment buyers over a period of 18 months.



Huawei also said that the US congressional committee probe which branded the company as a threat to US national security is unlikely to affect its business elsewhere overseas, although the report has prompted Canada and the UK to look into security risks.



When asked whether other overseas business would be affected, Huawei vice president Zhang Chunxiang said there would be no impact.

LUFTHANSA Systems says XL Airways France has selected its aeronautical IT solutions comprising Lido/Flight, Lido/RouteManual, Lido/eRouteManual and Lido/iRouteManual as well as Lido/ObstacleData.

The Lido/Flight IT solution is intended to optimise the French carrier's flight planning processes. Furthermore, the Lido/RouteManual navigation charts in their electronic (Lido/eRouteManual) and tablet (Lido/iRouteManual) versions as well as the airport data provided by Lido/ObstacleData enable the airline to work with the most up-to-date aeronautical data.



Lido/Flight covers all aspects of flight planning and provides dispatchers with many optimisation options regarding flight time, fuel consumption or costs of each flight. Taking into account the latest flight-related data such as weather conditions, total weight and air traffic situation, Lido/Flight calculates the most suitable route for each flight from all available options. This can lead to fuel savings of up to five per cent.



"We have been a very satisfied user of the FMS navigation data from Lufthansa Systems for several years now," said Mickall Clermont OCC manager at XL Airways France.