REAL ESTATE

Increasing West Coast Container Capacity

BY CSA STAFF

For some Supply Chain Summit attendees, the highlight of the conference was the grand finale—a tour of the Port of Oakland including the American President Lines (APL) terminal and one of its container ships, the APL Thailand.

Despite the growing congestion at other ports along the West Coast, most notably the Los Angeles/Long Beach port, the Port of Oakland has been under-utilized, running at about 60% capacity. However, APL’s terminal has been slightly better, operating at approximately 75% capacity. Recognizing that the Port of Oakland provides a viable alternative to relieve container congestion on the West Coast, APL decided to increase capacity and operating efficiencies at its Oakland facility.

The APL terminal is undergoing a significant transformation that began in July 2006 and is scheduled for completion in June 2008. A $39.5 million upgrade of the terminal, including construction of a 5,000-sq.-ft. marine operations building and reconstruction of the container yard, was approved by the Oakland port commissioners.

Although the increase in acreage will be modest—the new terminal will comprise 80 acres compared to the old terminal’s 79.2 acres—the terminal’s capacity will soar. The new terminal will accommodate 13,800 TEU (20-ft. equivalent unit) containers, all decked, while the old terminal had capacity for 8,685 wheeled and decked TEUs. (Wheeled containers are stored on road chassis, but decked containers on the ground will provide better utilization of the real estate.)

In addition to the transition to all decked containers, the configuration of the yard’s container lanes will also change so that containers will run parallel to the water line, which is more efficient than the current perpendicular line up. The new terminal will be able to handle 9,000 vessel lifts per week and 460,000 lifts annually, compared to the current capacity of 3,000 weekly lifts and 124,000 annual lifts. (A vessel lift is the movement of a container on or off a ship.) The terminal’s goal is to turn a container eight times annually, each time loaded with revenue-paying cargo.

There will also be greater efficiencies with the management of refrigerated containers, a.k.a. “reefers.” The new terminal will utilize reefer racks, equipped with a fiber-optics system that allows remote temperature monitoring from the terminal’s office. Reefers account for slightly less than 10% of the APL volume in Oakland and, in addition to perishable food and frozen products, they typically transport fragile cargo such as orchids and bullfrogs.

The Oakland port maintains 24-hour security with one entrance in and one exit out. Trucks and containers are scanned for radioactive materials, using radiation portal monitors. Additional surveillance is provided by high-definition cameras attached to tall poles that can obtain a solid read of trucks’ license plates across the yard.

In the near future, the port will convert to a biometrics-based worker-identification program. Oakland will be the second port in the country to deploy the biometrics system, which is comparable to the one used at the U.S. Pentagon, and APL will be the first terminal at the Port of Oakland to implement this technology.

Touring the container ship, from the captain’s quarters to the engine room, was a huge treat for Supply Chain Summit attendees. The APL Thailand had docked the preceding day from its latest trip to Asia and was already loading containers and transitioning crew for its next journey. The ship operates a pendulum service between Asia and North America that typically requires 35 days, including the nine-and-a-half day trip to Asia and a 10-day return voyage. The route includes stops at ports in Japan, Korea, China, Hong Kong and Taiwan, and generally the vessel remains in each port less than 24 hours. The 23-person crew of the APL Thailand included three women plus two cadets from the Merchant Marine Academy.

Improvements Under Way at the APL Terminal

Source: American President Lines (APL)
  Old APL Terminal New APL Terminal
Acreage 79.2 acres 80.0 acres
Capacity 8,685 TEU containers 13,800 TEU containers
Container Lifts 3,000 per week 9,000 per week
Container Lifts 124,000 annually 460,000 annually
Gate moves 5,000 per week 14,940 per week

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REAL ESTATE

Report: Bloomingdale’s May Return to Dallas

BY CSA STAFF

Dallas, Bloomingdale’s might be returning to Dallas, according to a report in Women’s Wear Daily.

Bloomingdale’s has been on a growth pattern for the past several months, and Dallas is reportedly on the brand’s radar for future expansion, the WWD report said. Phoenix and Seattle also were mentioned as potential sites.

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REAL ESTATE

Mobile Moves In

BY CSA STAFF

M-commerce is already booming in Asia and parts of Europe. While the United States has been gun-shy about committing to the process, tech-savvy retailers are getting a head start stateside.

Currently, there are 230 million wireless subscribers in the United States, and it is no secret that these consumers are relying on their mobile devices for more than mere phone calls. If the iPhone hype last month is any indication of what is to come, retailers are beginning to understand that they need to be ready.

“It’s a marketplace that has exploded overseas and one you can’t ignore here,” said Joe Domek, director of e-commerce for TicketsNow.com, Crystal Lake, Ill. “It’s extremely cost-effective for getting traffic and the brand out in front of new eyes.”

Ticketsnow.com has been selling tickets to sold-out events since 1999, but it recently extended its e-commerce functionality to the mobile environment. However, some mobile browsers have sluggish speeds and operational problems that could deter consumers.

To avoid this issue, Ticketsnow.com turned to Seattle-based mPoria’s flagship service GoMobile!, a solution that allows retailers to build their own mobile-shopping site. Using a cell phone or mobile device, shoppers can research, compare prices and purchase brand-name products directly from the palms of their hands.

“People have their cell phones with them 24 hours a day,” Domek said. “So instead of waiting for a customer to get to a computer, we can be always readily available to them.”

Ticketsnow.com may not be seeing an overwhelming response yet, but it’s steadily growing, Domek said.

“We’re not focusing on the conversion rate right now; we want to be a leader in this landscape,” he said. “We also haven’t had a massive marketing campaign out there, so a lot has been happening organically.”

Ultimately, the company wants to be considered a “mobile concierge” that can offer all ticket information to customers. It also plans to send text-message alerts and coupons to key demographics through regional-targeting solutions.

“We are going to take it as far as the platform lets us,” Domek said. “We like to live by the idea that if something works, we are going to throw all of the money at it. If it’s good eating, we’ll eat all we can.”

Ticketsnow.com isn’t the only one helping itself. Realizing that its consumers are likely to have devices that allow them to surf the Internet, GameStop of Grapevine, Texas, is also testing the m-commerce waters.

GameStop’s EBGames.com site, maintained by mPoria, allows consumers to view its catalog, access site information, pre-order and shop. GameStop also has a reformatted checkout interface for mobile devices. Instead of forcing shoppers to thumb-in cumbersome shipping information, the interface automatically pulls up the user’s address through her phone number. Credit-card information is not stored for security reasons.

John Brittel, VP of e-commerce and direct marketing at GameStop, said that the company’s main initiative is to drive sales to the store.

“E-commerce is exciting, but the immediacy of driving customers to stores is amazing,” Brittel said.

“In the gaming industry, it’s all about getting the product as soon as possible,” he said. “While that is a disadvantage of e-commerce in general—a delay due to shipment—we want to get the customer into the store to close that sale right away.”

GameStop is also exploring how to initiate product reservations, notifications and availability functions. It plans to beef up its search capabilities and add a feature that sends item recommendations to friends, too.

In the meantime, GameStop is learning how its m-consumers shop.

“Like our e-commerce site, a lot of our traffic is research-based. They are inquiring about pre-releases and when products hit stores,” Brittel said. “What we found in the mobile category is that there seem to be more inquiries about catalog purchases—those looking for niche games— rather than pre-release products.”

Now that the iPhone is setting a new foundation for the future, m-commerce could be on the horizon for more retailers nationwide.

“I think it’s eventually going to meet up with traditional in-store shopping,” Brittel said.

“We are channel-agnostic, but given our limited resources, we have to prioritize the technology and services we adopt,” he said. “This offers us the marketing and revenue opportunities that puts us in front of our competitors.”

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