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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Sears Holdings ceo unhappy with 2Q

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $176 million, or $1.17 per diluted share, for the second quarter ended Aug. 4, compared with net income of $294 million, or $1.88 per diluted share, for the second quarter ended July 29, 2006. The company attributed the decline in its second quarter results from the same quarter last year to lower operating results at both Sears Domestic and Kmart, which were partially offset by improved operating results at Sears Canada.

“We are disappointed with our second quarter results. Our gross margins came under pressure from sales declines and increased promotional activity, and as a result, our net income was significantly below last year and our expectations,” said Aylwin Lewis, Sears Holdings’ ceo and president.

Sears Domestic’s comparable-store sales declined 4.3% for the quarter, while Kmart’s comparable-store sales declined 3.8%. Total domestic comparable-store sales declined 4.1%. The company reported lower sales across most merchandise categories at both Kmart and Sears Domestic, partially offset by increased sales of women’s apparel at both Kmart and Sears Domestic, as well as within consumer electronics and footwear at Sears Domestic. For the quarter, total revenues declined $0.6 billion to $12.2 billion in fiscal 2007, as compared to $12.8 billion for the second quarter of fiscal 2006.

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Lane Bryant pres. joins Christopher & Banks

BY CSA STAFF

MINNEAPOLIS Former Lane Bryant president Lorna Nagler will join Christopher & Banks as president and ceo effective Aug. 31. She will replace Matthew Dillon, who resigned from his position as president and ceo and as a member of the board of directors today. Nagler has also been elected as a member of Christopher & Banks’ board of directors effective Aug. 31.

Nagler most recently served as president of Lane Bryant, a division of Charming Shoppes. Before joining Charming Shoppes in April, 2002, Nagler served as a senior vp and general merchandising manager for apparel and jewelry at Kmart Corp.

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