Trans-Talk

2009 year end results were recently published by Canada’s four major seaports that handle international shipments.

They are ranked by total tonnage, with container traffic measured in Twenty-Foot-Equivalent units (TEUs), and change from 2008 shown in brackets:

1. Vancouver - 93.1 million tonnes (YTD Nov-09, -12.7%); 2.15 million TEUs (YTD Dec-09, -14%);
2. Montreal - 24.5 million tonnes (-12%); 1.25 million TEUs (-15.4%);
3. Prince Rupert - 12.2 million tonnes (+15%); 265,259 TEUs (+46%);
4. Halifax - 9.6 million tonnes (-6.2%); 344,811 TEUs (-11%).

MOL car carrier departing Annacis Island, Port Metro Vancouver - Max Burley photo

Cruise Ships

U.S. Transportation Secretary Ray LaHood today announced an immediate federal ban on texting¹ for drivers of commercial trucks and buses. Here’s the full text of the Department of Transportation press release:

U.S Transportation Secretary Ray LaHood today announced federal guidance to expressly prohibit texting by drivers of commercial vehicles such as large trucks and buses. The prohibition is effective immediately and is the latest in a series of actions taken by the Department to combat distracted driving since the Secretary convened a national summit on the issue last September.

“We want the drivers of big rigs and buses and those who share the roads with them to be safe,” said Secretary LaHood. “This is an important safety step and we will be taking more to eliminate the threat of distracted driving.”

The action is the result of the Department’s interpretation of standing rules. Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750.

“Our regulations will help prevent unsafe activity within the cab,” said Anne Ferro, Administrator for the Federal Motor Carrier Safety Administration (FMCSA). “We want to make it crystal clear to operators and their employers that texting while driving is the type of unsafe activity that these regulations are intended to prohibit.”

FMCSA research shows that drivers who send and receive text messages take their eyes off the road for an average of 4.6 seconds out of every 6 seconds while texting. At 55 miles per hour, this means that the driver is traveling the length of a football field, including the end zones, without looking at the road. Drivers who text while driving are more than 20 times more likely to get in an accident than non-distracted drivers. Because of the safety risks associated with the use of electronic devices while driving, FMCSA is also working on additional regulatory measures that will be announced in the coming months.

During the September 2009 Distracted Driving Summit, the Secretary announced the Department’s plan to pursue this regulatory action, as well as rulemakings to reduce the risks posed by distracted driving. President Obama also signed an Executive Order directing federal employees not to engage in text messaging while driving government-owned vehicles or with government-owned equipment. Federal employees were required to comply with the ban starting on December 30, 2009.

The regulatory guidance on today’s announcement will be on public display in the Federal Register January 26 and will appear in print in the Federal Register on January 27.

The public can follow the progress of the U.S. Department of Transportation in working to combat distracted driving www.distraction.gov.

¹Texting, or text messaging, generally means the typing and sending of short messages via cell phones or other hand-held devices. The SMS (Short Message Service) protocol is limited to 140 characters per message, but texting nowadays may include Twitter posts, image attachments, or automated payments or donations to causes like disaster relief in Haiti.

The Council of Ministers of Transportation today released “Urban Transit in Canada: Taking Stock of Recent Progress.” The report updates 2005’s Urban Transportation in Canada: Needs and Opportunities. It summarizes the status of transit funding, highlighting federal contributions, and gives a general overview of the nation’s transit systems.

Investment in transit has increased by 60% over 2005 levels, according to the report, with most of the increase devoted to capital spending. The report relies on CUTA (Canadian Urban Transit Association) for many of its numbers. Figures outlining federal contributions from the existing infrastructure fund and recent stimulus spending require careful examination and a grain of salt to get past the usual political self-congratulations and marketing focus.

Transit ridership has shown strong growth in recent years, helped along by the current recession and rising fuel prices. CUTA reports a 6.5% overall increase in ridership between 2005 and 2007. CUTA also reports that Canada’s total transit spending in 2007 was $7.86 billion, including operating and capital expenses. (In fiscal year 2008/09 governments collectively spent about $3.2 billion on Canada’s National Highway System (NHS). The NHS includes the nation’s main interurban and interprovincial roads.¹)

The 18-member Urban Transportation Task Force panel that wrote the report represents too much diversity to effectively communicate a fervent vision for the future of transit in Canada. Its conclusions and recommendations don’t rise much beyond platitudes.

• Transit is good.
• Transit needs more money and better security of funding.
• Traffic demand management is good (without any mention of how dismal Canada’s record is in this area).

The report’s four recommendations:

1. “All levels of government need to work together to provide adequate funding to support transit, while respecting jurisdictional responsibilities.”
2. Recent federal investments and continued commitment to long-term transit funding “is welcomed.” (?)
3. “Greater investment in transit, transportation demand management, improved planning processes, and the use of advanced technology” is needed.
4. “All governments should promote transit use by raising public awareness of its economic, social, and environmental benefits.”

(Sources: ¹Council of Ministers Responsible for Transportation and Highway Safety, Canada’s National Highway System Condition Report 2008; Urban Transit in Canada: Taking Stock of Recent Progress; CUTA)

Transat A.T. Inc., Canada’s largest integrated tourism company, reported its fourth-quarter and year-end financial results today.

For the fiscal year ended October 31, 2009, Transat posted revenues of $3.545 billion, an increase of 1% over the $3.513 billion recorded in 2008. The Corporation’s margin was $93.4 million, down 27% from the $127.8 million posted in 2008, and its net income was $61.8 million ($1.85 per share on a diluted basis), compared with a net loss of $49.4 million ($1.49 per share on a diluted basis) in 2008. Before non-cash and non-operating items, Transat’s adjusted after-tax income(3) for fiscal 2009 was $33.7 million ($1.01 per share on a diluted basis), versus $55.4 million ($1.67 per share on a diluted basis) in 2008.

The company’s stock (TRZ.B-TSX) rose 2% to $19.80 in mid-day trading after the announcement.

Transat’s main businesses are:

• Air Transat, the holiday air carrier;
• destination services (holiday packages);
• hotels - a 35% interest in five hotels in Mexico and the Dominican Republic;
• retail distribution network of agencies such as Marlin Travel and Travel Plus.

(Source: Transat press release)

Canada Pension Plan Investment Board (CPP) and Sterling Partners announced today that they have agreed to amend their acquisition agreement dated October 7, 2009 by increasing the bid from $8.00 to $9.50 in cash per unit. The amended offer values Livingston, Canada’s largest customs broker, at roughly $324 million.

The higher price is offered even though Mullen’s $8.50 per unit offer has expired. Prompting the sweetened offer were:

• slightly less than 60% of units have been tendered to the original CPP-Sterling offer, while the transaction must be approved by two-thirds of Livingston’s unitholders
• the debt markets have improved, enabling the buyers “to put a more appropriate capital structure in place and amend our valuation of the company.”
• improving economic conditions and unexpected gains in the Canada-U.S. trade surplus “have altered the fundamentals of this transaction.”

Now we know what was holding up completion of the deal, which is expected to be finalized in early 2010. (Source: Livingston press release)

What’s the day’s biggest news in Seattle?

Boeing’s B787 Dreamliner flew for the first time. It prompted live coverage from the city’s television stations, all of which devoted their full resources to the story. The most notable aspects of their videos are the flexible wings and the size of the two jet engines.

The plane is designed to carry 250-290 passengers on long-range flights of up to 14,400 km. (9,000 miles). Boeing has orders for 840 of the jets. The first delivery to Japan’s All Nippon Airways is scheduled for late 2010.

CBC has a concise overview of the aircraft’s trials, tribulations and tardy debut. (Sources: Boeing; CBC News,”Dreamliner completes maiden flight“; KING TV story/video)

Transport Topics Online (TT), published by the American Trucking Association, has published its annual lists of North American trucking companies and Top 50 Logistics Companies, ranked by revenue. There are two Transport Topics 100 Lists, covering For Hire and Private Carriers.

The lists use 2008 data, and are “compiled from annual reports of publicly owned companies and directly from management of privately owned firms. In some cases, revenue estimates were used to determine sector rankings.”

The Top 100 lists of For Hire and Private carriers tabulate:

• RANK 2008
• RANK 2007
• GROSS REVENUE
• % CHANGE IN REVENUE from previous year
• NET INCOME
• % CHANGE IN NET INCOME from previous year
• NUMBER OF EMPLOYEES
• EQUIPMENT (total units of -)
  • tractors
  • owner-operator tractors
  • trailers
  • air cargo containers
  • aircraft
  • delivery vehicles (including cars, vans, straight trucks & motorcycles)
• OPERATING UNITS (i.e. divisions and/or description of services)

The TT Top Logistics 50 list of logistics companies include many of the same names as the Top 100 lists above. The logistics company data is arranged thus:

• RANK 2008
• RANK 2007
• GROSS REVENUE
• NET REVENUE
• NUMBER OF EMPLOYEES
• INDUSTRY EXPERTISE/KEY CUSTOMERS
• DESCRIPTION OF SERVICES

The Top 50 also contains the following, less detailed lists:

• Top 50 freight transportation firms
• Top 25 freight brokers
• Top 25 dedicated contract carriers
• Top 25 freight forwarders
• Top 25 warehousing firms

CCJ Top 250

An alternative is offered by the Commercial Carriers Journal (CCJ) Top 250 for 2008. Data sources are essentially the same as for the Transport Topics lists, but are presented as an aggregate list of private, for-hire, and 3rd-party logistics companies.

Both lists are released around September and use data from the previous calendar year (although TT references “2009″ in the title, its data is no newer than CCJ’s).

CCJ gives carriers a chance to review for accuracy data obtained from public sources. Its ranking methodology “is a blended scale based on a combination of revenue, total power units and number of drivers rather than a ranking simply by revenue.”

The CCJ list concentrates more exclusively on U.S. carriers than does TT, but Canadian trucking firms are not a major presence on the TT list either.

The CCJ Top 250 also includes a ranking-by-segment section and slightly more detail than TT on fleet composition.

Today’s Trucking Top 100 - Canada

In Canada, Today’s Trucking publishes, in their words, “the most authoritative ranking of for-hire trucking companies in Canada.” An online edition of the Top 100 is updated annually in March.

The list doesn’t contain revenue figures, although ambitious researchers can find such data for public companies, either through company financial reports or online databases such as SEDAR (System for Electronic Document Analysis and Retrieval - available at http://www.sedar.com).

Companies are ranked according to total pieces of equipment. The list has the following data headings:

• Total
• Trucks
• Tractors
• Trailers
• O/Os (owner/operators)
• Employees

(Links: Transport Topics Online, 2009 Logistics 50 (with links to the other lists, all in pdf format of approximately 1.2 MB each); Commercial Carriers Journal, 2008 Top 250 (22pp., 2.3 MB pdf); Today’s Trucking Top 100)

The American Transport Association (ATA) today released a very gloomy, end-of-the-year assessment of the U.S. airline industry in 2009 — a year in which bad news outnumbered good news.

The ATA’s Bad News

• Post-2000, fares have notcaught up to expenses, forcing airlines to reduce air service
• U.S. spending on domestic commercial air travel remains well below pre-2001 levels
• Despite worst global recession since the 1930s, crude oil is trading at $75-$83 per barrel
• Fuel price volatility forced many airlines into unfavorable hedge positions
• U.S. employment hit 10.2% in October 2009 –the highest since April 1983
• Plunge in demand for air transport has eroded, wiped out benefits of lower fuel costs
• International capa(http://www.faa.gov/data_research/aviation/)city not as quick to match falling demand in premium cabins
• Poor credit has forced many carriers into prepayment mode with many vendors
• Financial pressure from federal, state, local and international authorities is rampant
• Even profitable years have been inadequate to cover cost of capital

There were 16%, or 1,300 fewer planes in the fleets of USA carriers in 2009, compared to the peak in 2007.

Source: FAA Aerospace Forecasts (http://www.faa.gov/data_research/aviation/)

It is expected that once final figures are in, 2009 domestic seat capacity will have contracted by almost 7% from 2008, when capacity was already falling.

The Industry Review and Outlook report charts various airline industry statistics and quotes financial executives and reporters to support the ATA’s plea for lower taxes and fees from all levels of government. (Source: ATA, “Industry Review and Outlook” (48pp., 2.1 MB pdf))

The following dated excerpts were culled from press releases by Livingston International, after it had agreed to a $273 million buyout offer from the Canada Pension Plan investment board and Sterling Partners.

Oct 8, 2009
[The offer is subject] “to the approval of two-thirds of Livingston’s unitholders at a special meeting anticipated to be held in the second half of November 2009.”

Oct 29, 2009
“Special Meeting to be Held on November 24, 2009″

Nov 17, 2009
“the upcoming special meeting, currently scheduled for November 24, 2009.”

Nov 23, 2009
“The meeting will now take place on Friday, December 11, 2009, at 9:30 a.m. EST. …The voting deadline has been extended to Wednesday, December 9, 2009…
The postponement was requested by CPP/Sterling pursuant to the terms of the October 7, 2009 acquisition agreement between CPP/Sterling and Livingston.”

Dec 10, 2009
“The meeting will now take place on Wednesday, December 23, 2009″
“the voting deadline has been extended to Monday, December 21, 2009″
Again, at the request of CPP/Sterling.

Canada’s merchandise exports rose 3.4% in October led by a strong gain in exports to the United States which accounted for three-quarters of the increase. Canada posted a trade surplus with the world of $428 million, as imports decreased 0.8% in October, compared to a deficit of $850 million in September.

Statistics Canada chart

Canada’s trade deficit with countries other than the USA was $3.0 billion in October compared to $2.9 billion in September as exports grew 2.9% and imports rose 3.2%. (Source: Statistics Canada, Canadian International Merchandise Trade - Oct 2009)