Global Logistics—June 2010
Geographically it’s not much of a stretch and historically there’s precedence. But the famous locks linking the Atlantic and Pacific Oceans will become the transportation and logistics hub of the Americas when expansion is complete, says Alberto Alemán Zubieta, administrator/CEO of the Panama Canal Authority.
Speaking at the Panama Business Forum in Panama City recently, Zubieta underscored how the new Canal will maximize the country’s geographic position and capture significant infrastructure investment. As a port with terminals on both oceans, the Panama Canal is in the center of a developing network of rail and roads that will likely attract multinationals looking to relocate regional headquarters.
The United Arab Emirates (UAE) is counting on German engineering to help build a high-capacity railway system. Deutsche Bahn recently signed a Memorandum of Understanding with the UAE government that will pump billions of dollars into developing regional transport networks including a metro system, tram services, and a long-distance line linking Abu Dhabi with the southern emirates.
The agreement comes months after the German rail operator signed an even bigger deal in Qatar and Bahrain. Expectations are that Deutsche Bahn will dovetail these expansion projects with similar freight initiatives, especially as it becomes increasingly difficult to expand and compete in Germany and elsewhere on the Continent.
Volcanic ash clouds have cast a pall over the European air cargo industry, but there is one silver lining. Charter airfreight operators have seen a noticeable swell in demand for their services. Chapman Freeborn, an England-based air charter company, reports increasing charter requests to destinations where there is typically ample scheduled capacity, especially between European and U.S. hubs.
Forwarders and shippers are requesting and booking flights using airports anywhere in mainland Europe, even at the time and expense of trucking freight far longer distances. The charter company has seen demand across all industries, but especially for mission-critical shipments.
The European Union’s (EU) Import Control System (ICS), which mandates that shipment information be communicated to Customs in advance, is shaking up import compliance in a scenario familiar to U.S. consignees. Similar to the U.S. Importer Security Filing (10+2), the ICS aims to deliver critical data to authorities before a shipment reaches the EU so they can better assess risks.
Effective Jan. 1, 2011, the regulation places the burden of compliance on carriers. But importers and exporters will have to provide timely and accurate information or shipments will be delayed. Not surprisingly, shippers and transporters are voicing concerns about how this information will be gathered, how the ICS will be financed, and how this effort will be rolled out across 27 countries.
The Latin America region is projected to invest more than $450 billion in strategic infrastructure projects between 2011 and 2015, according to a report by CG/LA Infrastructure, a Washington, D.C.-based consulting firm. But that number represents an average investment of slightly more than two percent of GDP region-wide, compared to six percent in India and 10 percent in China.
Latin American countries with the best prospects for investment are those with the strongest sense of infrastructure as critical to competitiveness. Brazil, with World Cup and Olympics projects on tap, is projected to show an annual 18-percent increase in infrastructure spend; Colombia, as peace gains traction, follows at 17.6 percent. Mexico’s investments, by comparison, are expected to rise at an annual rate of approximately eight percent.
CN, the Halifax Port Authority, Ceres Terminals, and Halterm Container Terminal have reached an agreement to align performance in the Halifax Gateway supply chain. The partnership will explore ways to enhance the port’s role as a preferred trade corridor from the Atlantic seaboard to Ontario, Quebec, and U.S. Midwest markets. The effort establishes performance metrics including times for unloading and loading containers between vessels and cars, the timing and placement of rail cars at terminals, and CN transit times to key markets in eastern and central Canada and the U.S. Midwest.
The International Air Transport Association (IATA) has thrown its support behind Japan’s vision of establishing more efficient infrastructure and increasing its air transport competitiveness. But the Japanese government must first address cost issues that are impeding the country’s ability to compete in the Asia-Pacific market, warns Giovanni Bisignani, IATA’s director general and CEO.
Bisignani cites Tokyo’s Haneda Airport’s per-tonne charge for international operations, which is double that of airports such as Singapore’s Changi, as an obstacle to attracting hub traffic serving the Chinese market. “International and domestic operations use the same infrastructure,” he says. “There is no justification for international charges to be higher. In fact, the increased traffic should reduce unit costs. Setting such a high charge for Haneda ignores the natural impact of added capacity to reduce unit costs.”
Bisignani also urges Japan’s aviation leaders to pursue adopting e-freight, which would reduce costs and speed shipment processing times.