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UTi WORLDWIDE ACQUIRES INDIAN FREIGHT FORWARDER
 
RANCHO DOMINGUEZ - UTi Worldwide Inc. has completed its acquisition of Indair Carriers Pvt Ltd, a freight forwarder ranked by the International Air Transport Association (IATA) as the largest airfreight export forwarding company in India. Indair, with 150 employees, achieved approximately $32.5 million in revenues last year  and moved in excess of 1,200 tons of airfreight on average per month. Headquartered in Delhi, Indair operates from five gateway points - Bangalore, Bombay, Calcutta, Madras, in addition to Delhi - with a regional network of sub offices. In addition, the company - which will now operate under the name UTi India - is a significant master loader of cargo and works with leading export houses spanning the fashion, apparel, carpets, handicrafts and leather industries, said UTi Executive Vice President Alan Draper. "We expect to be significantly better positioned to negotiate premium lift, transit times, rates and group benefits for our client base in the India subcontinent, " he said, adding that the acquisition will give the new company's client base "full and seamless access to UTi Worldwide's global network of air and ocean freight forwarding, contract logistics, customs brokerage and other logistics-related services." Terms of the transaction were not disclosed.

GROCERY RETAILERS SEE LOGISTICS COSTS CLIMB

WASHINGTON, DC - Customer demands for quicker service are hiking logistics costs for grocery suppliers, finds a study by the Grocery Manufacturers of America. Leading retailers are responding by pushing more responsibility down the supply chain to manufacturers with an expectation for shorter order-to-delivery cycles. The results of the study show that logistics costs have increased by 12%, from 6.6% of net sales in 1999 to 7.4% in 2002. The study suggests several reasons for the increase, including a more dynamic supply chain, with decreased response time to retailers' required delivery appointments; higher service level expectations from retailers for on-time delivery and order completeness; conflicting incentives and insufficient and inaccurate information between trading partners, resulting in a number of operational inefficiencies; and an increased array of customized supply chain services offered by manufacturers. Suppliers are adjusting to the market forces by making greater use of outsourcing for warehousing and other functions and performing more direct-from-plant shipping to help reduce warehousing costs. They are also shipping larger-sized shipments with larger trucks and four-way pallets that make it easier to move product on light cubed-out loads. On a positive note, the study reports that inventory levels are coming down, from a high of 46 days in 1999 to 45 days in 2002. The industry target is 27 days.

SARS FORCES CATHAY PACIFIC TO CUT SERVICE

HONG KONG - Cathay Pacific Airways is asking its employees to take four weeks of unpaid leave between June and September, to help the Hong Kong-based carrier cope with the downturn in business due to the SARS epidemic. The airline's passenger traffic is off about 75% from the same period a year ago. Its schedule has been cut by about 45% and 16 aircraft have been taken out of service in order to adjust to the sharp drop in demand. Stephen Wong, Cathay's cargo manager for North America, said he is awaiting direction from the head office on how to implement the plan. Cathay has about 50 cargo staffers in North America, mostly in sales, service and management, while cargo handling is done by contractors. Cathay's transpacific cargo business has seen little impact from the epidemic, despite the reductions in passenger capacity. Wong said there has been no change in the carrier's 747-400 freighter schedule, which accounts for most of its capacity. The carrier operates six freighter flights a week to Hong Kong from Los Angeles, New York, and Chicago, as well as three a week from San Francisco and Vancouver, B.C.

DOT OFFICIAL URGES SINGLE AIR SERVICE FRAMEWORK

MIAMI - A high-level US transportation official is urging Western Hemisphere governments to abandon restrictive aviation policies and to work toward a single commercial air service framework. In recent remarks in Florida, Under Secretary of Transportation Jeffrey Shane said a single hemispheric agreement on aviation trade should replace the existing "crazy quilt" of bilateral agreements. He said he hoped the success of the North American Free Trade Agreement and negotiation of agreements with Chile and Central America to open trade for goods and other services would bolster support for opening trade in airline service. At present every Latin American country has a bilateral aviation agreement with the United States and every other country in the region totaling literally hundreds of agreements and most of them containing price and service restrictions, he said. "It seems clear that the approach to international aviation taken to date throughout much of the Americas has failed," Shane said. "It has failed to provide consumers with the benefits and options available to them in other markets, and it has failed to ensure the ultimate survival of many of the national carriers that the restrictive agreements of the past were meant to protect." Shane cited as models some regional agreements that he said work well: Three Scandinavian countries negotiate as one on aviation agreements with other countries. The United States and six other Asia Pacific Economic Cooperation (APEC) countries agree to operate flights freely among each other.

K LINE MERGES TWO LOGISTICS COMPANIES
 
TOKYO - Kawasaki Kisen Kaisha, Ltd. - K Line - has plans to merge two of its logistics subsidiaries into a single entity later this year. Effective October 1, Naigai Unyu Co. Ltd. and Shinto Transportation Co. Ltd. will be merged and begin operations under the Sea Gate Corp. name, the company said. Sea Gate will take over the combined operations of both companies and offer harbor transportation, freight distribution, and logistics services throughout the island of Kyushu. Sea Gate will be headquartered in Hiroshima with branch offices in Moji, Mizushima, Kure, Tokuyama and Fukuoka.

WAN HAI EXPANDS TRANSPACIFIC SERVICE PROFILE

KAOHSIUNG - Taiwan-based Wan Hai's transpacific service has receive a boost with the phasing-in of the containership Wan Hai 266 into its China-transpacific (CTP) service. The carrier currently deploys five vessels in its independent CTP service, with fixed weekly sailings connecting Yantian - Hong Kong - Kaohsiung - Los Angeles - Oakland - Pusan - Taichung - Hong Kong - Yantian. Since the commencement of the CTP service in June, 2001, Wan Hai has deployed chartered vessels. However, by the middle of last month, the company had deployed wholly-owned, new-build sister ships - the Wan Hai 261, the Wan Hai 262, the Wan Hai 263, the Wan Hai 265 and the Wan Hai 266. Each of the ships has a capacity of 1,658 TEUs. Wan Hai launched its first service in June, 2000 chartered slot space on CMA-CGM's transpacific service. The carrier launched its own independent routing just one year later.

AIRPORT FUNDING APPROVED BY OPIC

WASHINGTON, DC - The US Overseas Private Investment Corporation (OPIC) has approved up to $200 million in financing for the construction of a new international airport in Quito, Ecuador.  OPIC said an investment guaranty would be granted to Corporacion Quiport S.A and that the financing would be used for the construction of a new international airport about 20 miles  outside of Quito. The location of the existing Mariscal Sucre International Airport in the center of Quito, combined with its short runways, limits both aircraft payload and revenue-generating capacity. "Construction of a new international airport will facilitate economic growth in Ecuador by providing more reliable, safer, better airport operations, and by mobilizing additional investment in the transportation infrastructure of the country," said an OPIC spokesman.

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