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SENATE COMMITTEE MAKES MSP RECOMMENDATIONS

WASHINGTON, DC - The Senate Commerce, Science and Transportation Committee recommends the U.S. government pay $3.1 million per commercial US-flag ship enrolled in its Maritime Security Program reauthorization. The provision to reauthorize MSP was included in the committee's proposed 2003 Maritime Administration Authorization Act during a mark-up session June 26. MSP was created under the 1996 Maritime Security Act and is managed by the Maritime Administration. The current program, due to expire September 30, 2005, provides the federal government with immediate access to 47 military-useful commercial container and roll-on/roll-off vessels during times of war or national emergency. To help offset the higher vessel operations costs, the federal government pays the MSP vessel operators $2.1 million per ship annually. The current House version of MSP reauthorization, which is included in the 2004 National Defense Authorization Act, calls for an annual payment per ship of $2.6 million. Both Senate and House MSP reauthorization bills, however, request increased vessel enrollment to 60 ships for 10 years.
 
FIRMS ANNOUNCE LOGISTICS SOFTWARE PARTNERSHIP

LONG BEACH - FreightDATA Software and Ventura Transfer Company (VTC) have inked a partnership agreement to develop FreightDATA Bulk, a fully integrated bulk transportation software solution. The product is being developed as means to support a variety of VTC functions including vehicle dispatch, tracking, maintenance and driver management as well as a host of accounting functions such as billing and collections. This fully customized solution will include web tracing, wireless tracking and imaging. VTC expects to have the software fully installed and functional by the end of the first quarter of next year. FreightDATA Software, which began operations in 1984, develops  integrated applications for the LTL (less-than trailerload), TL (trailer-load), intermodal, and trucking industries. Formerly known as Ventura-Lesbro Company, Ventura Transfer Company, headquartered in Long Beach, manages the handling and distribution of products shipped in bulk. In addition to providing two full service ISO-rated Container depots in California, VTC also has a network of nine railcar transfer terminals in California and Arizona that deliver bulk commodities throughout the US. The company also operates  two warehouse-distribution facilities in the Los Angeles area.

FEDEX RAISES GENERAL RATES FOR ALL SERVICES

MEMPHIS - FedEx Freight has implemented a 5.9% general rate increase, effective June 30. The increase will be applied by the company's two operating units, FedEx Freight East and FedEx Freight West. FedEx Freight is a subsidiary of FedEx Corp. This increase applies to intra- and interstate traffic, including Canadian trans-border and other international lanes, as well as accessorial and minimum charges. Various additional adjustments will be made to select lanes and service areas. Both of the FedEx Freight operating companies share a single base rate tariff and a single rules tariff, "making shipping easier and more convenient," the company said. The rate increase was prompted by increased health care and insurance costs, and other factors. In its most recent fiscal third quarter, FedEx said that FedEx Freight revenue rose 12% to $493 million from a year earlier. While average daily shipments were flat, yields rose 10 percent because of previous general rate increases, revenue from fuel surcharges and other factors. In June, FedEx Corp. - the largest overnight package deliverer in the business - said that it planned to offer voluntary buyouts to 14,000 management and salaried employees at its main US express delivery unit to save money.
 
NYK MAY BEAT EARNINGS OUTLOOK AS RATES RISE
 
TOKYO - Nippon Yusen K.K. (NYK), Japan's largest shipping line, may beat its earnings forecasts after its customers agreed to a 15% increase in freight rates to the US. The higher rates may help Tokyo-based Nippon Yusen to raise its operating profit forecast by as much as $42 million, or 5.7%, this business year, company President Takao Kusakari said. The increased rates will also contribute $83.6 million to current profit, 14% more than originally forecast, the company said. Nippon Yusen has lost money in its container business for about two years because of falling cargo rates as ship capacity exceeded demand. Rising trans-Pacific trade is boosting cargo demand, making it easier for NYK, Kawasaki Kisen Kaisha Ltd. ("K"-Line) and other shipping lines to raise rates. Last month, NYK forecasted that operating profit, or sales minus the costs of goods sold and administrative expenses, for the year to March 31, 2004 will probably be $736 million, a record and up 27% from a year earlier. Current profit is forecast to be $585 million. The company predicts net income of $276 million, on sales of $10.8 billion. NYK is a member of the Transpacific Stabilization Agreement (TSA), which increased the rate for a 40-foot equivalent container (FEU) moving eastbound to the US West Coast by $700 dollars. Individual companies must negotiate with their customers. NYK is reportedly getting an average increase of about $500 a container. The rate increase followed a 20% decline last year while the higher rates, combined with cost reductions, will allow it to make its container business profitable, the carrier said. Cargo volumes to the US increased 20%  from February to April, compared with the same period last year.

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