Japan Airlines (JAL) will halt its scheduled freighter flight services and start utilising the cargo belly space of passenger flights by the end of October. The cargo capacity in the passenger flights will provide three times the volume available on its cargo flights. The nation's international carrier aims to improve its financial standing through this new cargo business structure, as market conditions for international cargo business are bleak.

JAL will continue its cargo services by using the belly space of 508 weekly passenger flights on international routes and 904 daily one-way flights on 134 domestic routes. JAL had filed for protection from creditors earlier this year, due to more than US$25 billion of debt.

Source: JAL

As calls grow louder in the U.S. to pressure China over its undervalued currency, it’s good to check in with William Fung, group managing director of Li & Fung, the giant Hong Kong-based trading company that sources goods from China and other countries for companies such as Wal-Mart. Bruce Einhorn spoke to Fung when he stopped by the Bloomberg office to talk about Li & Fung’s disappointing earnings.

When it comes to the fight over the yuan, he doesn’t expect Beijing to budge. To understand why, he says, look back to Japan’s “Lost Decade,” the period after Japan’s real-estate bubble burst in the early 1990s. “Every time I talk to these guys [in China], they say ‘We’re not going to repeat Japan’s mistake,’” he says. For them, the mistake was the deal the Japanese made with the U.S. and the Europeans back in 1985 to allow the dollar to depreciate against the yen. According to Fung, Chinese officials are convinced that agreement, signed at the Plaza Hotel in New York, doomed the Japanese. “They think the Plaza Accord was the beginning of the Lost Decade,” he says.

Some people outside China argue a yuan appreciation would help the Chinese achieve their goal of boosting domestic demand, making China less reliant on the export sector (which crashed after the Lehman bankruptcy). Fung doesn’t think Beijing’s ready to buy that line. “They fully intend to follow Japan and Korea” and focus on exports, he says. “They’re not going to go to this Amercan-style consumer-spending-on-steroids economy for a while. They just don’t believe in it.” In order for Chinese consumers to start spending big, Fung says, Beijing first needs to establish a solid social-safety net so ordinary Chinese people feel more confident in spending rather than saving. “That takes time,” Fung adds, “as you have seen in America.”

One thing to remember: It’s in Li & Fung’s interest for China to keep the yuan down. The company’s traffic is largely one-way, to the U.S. If the yuan is undervalued and exports from China to the U.S. are cheaper, that should suit Li & Fung customers just fine

Author: Bruce Einhorn.

Global commerce will grow this year after shrinking 12 percent in 2009 as economies from China to the U.S. recover from the deepest recession in 70 years, the World Trade Organization said.

The volume of world trade will expand 9.5 percent, said WTO Director-General Pascal Lamy, fueled by growth in Asia led by China and India, after falling the most since World War Two in 2009. Lamy expressed concern about the resurgence of protectionist policies as the recovery in Europe and the U.S. lags behind Asia and there are signs China’s economy is overheating.

While many countries have emerged from recessions, the WTO has pressed governments to take steps to stimulate commerce and bolster the global trading system as they prepare exit strategies from the stimulus measures adopted to fight the slump. Growth in Asia and other emerging markets won’t be sufficient to sustain the global recovery and developed nations should be wary of reversing stimulus too soon.

Source: Bloomberg

Sinotrans, which operates freight-forwarding and express-delivery services in China, is a unit of state-owned China National Foreign Trade Transportation (Group). The shipping and logistics firm plans to boost capital spending this year and is reportedly interested in minority investments in mainland Chinese ports amid a turnaround in domestic and international trade.

Sinotrans President Zhang Jianwei said the company will focus on expanding its intra-China trade business in 2010 to ride on the nation's booming economy, which grew 8.7 percent last year.

"Export trading volumes are still a major contributor to our businesses but this will likely change" as Sinotrans invests to develop its domestic operations, Zhang said. He said the company's domestic trading operations account for about 20 percent of its business, but didn't provide a growth target.

As the world's recovery has yet to gain traction this year, international trade will likely remain volatile, putting pressure on Chinese shippers like Sinotrans to shift more of their focus to domestic business.

China's first international cooperation platform for boosting low-carbon economy has been established at Tianjin Economic Development Area (TEDA) in the northern China's industrial hub.

Named TEDA Eco Center, the newly established has recruited 18 senior advisors and partners, including China office of the United Nations Industrial Development Organization and the Japan Research Institute, Limited.

An industrial symbiosis project aided by the European Union has been launched with the help from TEDA Eco Center.

The four-year project, with a cost of 1.85 million euros, aims to achieve recycling of resources, energy efficiency and emissions reduction through share of raw materials, energy, logistics and human resources among different enterprises.

AFP- The global container shipping industry remains in a "very fragile" state due to weak demand and a glut of ships, the world's largest shipping company said on Wednesday.

Maersk Line said companies should go slow in bringing back to service hundreds of ships idled during the recession, otherwise the sector will extend losses which totalled $US15 billion ($A16.32 billion) in 2009. In terms of volume, about 80 per cent of world trade is carried by sea.

As global trade slowed down during the global economic crisis last year, freight rates plunged and 11 per cent of the world's container shipping fleet, or about 500 vessels, had to be parked.

Mr Van Schoor from Maersk Line said there are signs of a pickup in global trade, with the United States and Europe importing more from the rest of the world, but this is being driven by companies stocking up on inventories rather than a surge in general demand. "The situation remains very, very fragile for the shipping industry,"

He cited data showing that US imports rose 13 per cent year-on-year in the fourth quarter of 2009, but retail sales in the same period expanded by only 1.0 per cent.

For Europe, the continent's imports were up 3.0 per cent, but retail sales climbed a mere 1.0 per cent.

"What this is telling us is that the underlying demand for growth is not there yet," he said.

He also cautioned against the idled ships going back into the market, saying it will further upset the imbalance between a glut in capacity and weak demand.

Source: Summary from AFP

Kimberly Clark said it will create a global procurement division as part of its quest to shave off as much as US$500 million in costs through 2013.

The global cuts are expected to take place in 2011 through to 2013 from leaner manufacturing and supply chain practices and the formation of a global procurement organisation, the company said in an investor presentation this week. The initiative is part of the company's wider FORCE (Focused On Reducing Costs Everywhere) strategy which saw Kimberly Clark saving some US$400-US$450 million from 2008-2010.

"We have made excellent progress since we originally launched our Global Business Plan in 2003," said Thomas J. Falk, chairman and CEO. "Our updated Global Business Plan represents our strategies and plans to achieve our existing top- and bottom-line growth objectives. We will manage our portfolio to drive growth, margin and cash flow."

He added: "At the same time, we will remain financially disciplined, with a strong focus on delivering ongoing cost reductions and increases in ROIC. We will continuously improve the effectiveness and efficiency of our organization as we create a leaner, stronger and faster company."

Source: Kimberly Clark

The Japan External Trade Organization (JETRO) recently released the results of its latest annual survey on the international operations of Japanese firms. The survey, conducted between November and December 2009, received replies from 935 firms, or 30.1% of 3,110 companies sent questionnaires. Firms were polled on their international and domestic operations, plans to expand business in China, utilization of FTAs and views on business environments in Asia.

According to the survey, the majority of respondents (62.1%) have overseas bases, of which 74.9% have bases in China, 44.8% in the US and 38.0% in Thailand. By location and function, China ranked highest in the sales base and production base categories, at 49.2% and 46.8%, respectively. Notably, the percentage of respondents with a sales base in China rose 2.7 points from the 2008 survey.

The percentage of respondents planning to expand their business overseas (make new/additional investments) in the coming three years or so was 56.0%, a 5.7-point jump over last year’s survey. For overseas expansion plans by country/region and function, China ranked at the top in all categories. After China, locations registering increased interest as a sales base included the Asian NIEs, Indonesia and Vietnam.

When comparing current and future sales targets in developing countries, firms showed increasing interest in expanding sales to local firms, while the new rich & middle class and low-income segment remained important consumer targets.

Asked about their business plans (including trade, outsourcing and direct investment) in/with China in the coming three years or so, the percentage of respondents planning to expand/start new business rose 13.4 points from last year to 60.6%. By category, firms plan mainly to "increase exports" (up 13.9 points to 53.6%) and "establish or expand sales base" (up 8.7 points to 41.3%).

Regarding utilization of preferential tariff schemes under Japan’s FTAs with nine countries/regions (ASEAN, Chile, Indonesia, Malaysia, Mexico, the Philippines, Switzerland, Thailand and Vietnam), 33.8% of respondents (including those not engaged in trade) said they were "utilizing or planning to utilize" such schemes. This was a 6.3-point increase over the previous survey, which asked about the utilization under FTAs with five countries (Chile, Indonesia, Malaysia, Mexico and Thailand), indicating an upward trend in the utilization of FTAs by Japanese firms.

Looking at the use of preferential tariff schemes under each FTA by imports and exports, the Japan-Chile FTA ranked at the top for both categories: 36.1% for imports (13 out of 36 firms); and 36.8% for exports (25 out of 68 firms). If the firms considering an FTA’s utilization are included, the portion for exports would rise to nearly half (44.2%) for the Japan-Chile FTA and to around 40% for the Japan-Thailand and Japan-Mexico FTAs. Similarly, if firms considering FTA utilization are included in the figure for imports, the percentage would be about 40% for both the Japan-Vietnam and Japan-ASEAN FTAs, suggesting firms’ likelihood to increase utilization of FTAs in the future for both imports and exports.

Among third-party FTAs in effect within the Asia Pacific region, the ASEAN Free Trade Area (AFTA) was the most utilized, with about a third of firms engaged in trade (33.3%, or 45 out of 135 firms) citing its use; if firms considering AFTA’s utilization were included, the percentage rises to 51.9% (70 out of 135 firms).

Polled on plans to utilize the ASEAN-India, ASEAN-Australia and ASEAN-New Zealand FTAs, all of which were entering into force about the time of the survey (November 2009), almost half of respondents (46.8% or 37 out of 79 firms) were planning to utilize the ASEAN-India. The percentage was highest among firms in chemicals (84.6%, or 11 out of 13 firms) and cars/car parts and other transportation machinery (70%, or 7 out of 10 firms).

Source: JETRO

Opening of a fourth retail outlet in Kobe is yet another success of Barneys Japan Co. Barneys has stores in Tokyo’s Ginza and Shinjuku areas and in Yokohama and now this outlet in Kobe will be the first in western Japan.

Built in a commercial complex of the city’s posh shopping district, this new store is spread over an area of about 2800 square meters occupying three floors of the building. A wide variety of trendy and stylish products and well known international brands will be available in the store.

In a press conference at the new store, Naoki Nakamura, President of Barneys Japan Co said they would like to boost customer satisfaction by recognizing their needs in advance and offer goods accordingly. In addition he said they would like to satisfy their customers by providing a nice ambience inside the store.

March 24 (Bloomberg) -- Japan’s export growth accelerated to 45.3 percent in February, led by Asian demand that increased the likelihood the economic recovery will be sustained.

The year-on-year increase was faster than January’s 40.8 percent, the Finance Ministry said today in Tokyo. The median estimate of 17 economists surveyed by Bloomberg News was for a 45.7 percent gain.

More than $2 trillion in worldwide public spending has revived global trade, fueling sales for exporters from Komatsu Ltd. to Mitsubishi Electric Corp. The increase in shipments abroad is improving corporate profits, easing concern domestic demand will slow as the effects of government incentives to buy energy-efficient cars and home appliances wear off.

“Exports are recovering steadily on the back of a pickup in the global economy,” Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo, said before the report. “Japan’s economy will likely maintain the recovery trend, led by an increase in exports, even as household spending and public investment are expected to slow.”

Imports climbed 29.5 percent in February from a year earlier, resulting in a trade surplus of 651 billion yen ($7.2 billion). The median estimate of 22 analysts surveyed was for 560.6 billion yen.

The yen traded at 90.38 against the dollar at 8:55 a.m. in Tokyo, compared with 90.40 before the report was released. Exports fell a seasonally adjusted 1.7 percent from January.

Favorable Comparison

The surge in exports was partly due to a favorable year- on-year comparison. In February 2009, shipments abroad tumbled a record 49.4 percent as global trade froze following the collapse of Lehman Brothers Holdings Inc. five months earlier.

The rebound was driven by Asia, especially China, Japan’s largest overseas customer. China’s economy may grow 9.9 percent in 2010, accelerating from 8.7 percent last year, according to a Bloomberg News survey released this month.

Mitsubishi Electric yesterday forecast net income of 25 billion yen in the year ending March 31, reversing its previous estimate for a 20 billion yen loss. The maker of consumer electronics and assembly-line machinery cited increased demand from Asia, global government stimulus measures and cost cuts.

Komatsu’s Sales

Komatsu, the world’s second-biggest maker of large dump trucks and excavators, expects sales in China to climb between 40 percent and 50 percent in the year starting April 1, Kazuhiko Iwata, president of the company’s mining division, said this month.

Recent reports show the export-led recovery is spreading to the domestic economy. The unemployment rate fell to a 10- month low of 4.9 percent in January, bolstering consumer confidence. Service demand rose the most in more than a decade.

The Japanese government last week raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur corporate earnings, home building and consumer spending.

Some Bank of Japan board members said they had “shifted slightly upward” their view of the economy because of exports to Asia, February meeting minutes showed yesterday.

Still, the rebound hasn’t been fast enough to shake off deflation, which is squeezing profit margins and discouraging spending. The central bank last week doubled a credit program to 20 trillion yen to help spur consumer prices that have fallen for 11 consecutive months.

“Weak demand is being reflected in continuing price declines,” said Chiwoong Lee, a senior economist at Goldman Sachs Group Inc. in Tokyo. “With the exception of consumer durables, which have support from fiscal policies such as eco points, consumption is lackluster and exerting downward pressure on prices.”

Source: Bloomberg. Story by Keiko Ujikane

(March 2010, Hong Kong:) Hong Kong Air Cargo Terminals Limited (Hactl) released its tonnage throughput for February 2010. A total of 180,033 tonnes were handled in the month, representing a strong year-on-year growth of 34.7%. Cumulative tonnage for the first two months of the year was 392,656 tonnes, up 42.1% year-on-year.

Export volume for February was 91,800 tonnes, up 42.2% year-on-year. Total export volume for January and February was 207,097 tonnes, representing a year-on-year growth of 47.7%.

Import volume for February was 50,536 tonnes, up 31.0% against February last year. Aggregate import volume for the first two months of 2010 was 110,829 tonnes, representing a year-on-year growth of 47.3%.

Lilian Chan, General Manager, Marketing and Customer Service said, "Driven by the surge in air cargo traffic before the Chinese New Year as a result of the stabilising economy, tonnage throughput for the first two months of 2010 has achieved a record high and even reached the pre-downturn level. While we see positive signs of some recovery in early 2010, we remain cautious on the outlook for the rest of the year.

The summary of the export, import and transshipment volumes is tabulated as follows:

Tonnage handled by Hactl in February and January to February 2010

Beijing government has announced the city's logistics industry development scheme which has set a target of CNY7 trillion (US$1.03 trillion) by 2011 for the total value of cargoes using logistics service. Beijing is also aiming at an average annual growth rate of 12% in the logistics industry added value. It plans to reach CNY60 billion in its logistic industry value by 2011.

The city government is to speed up the development of five major logistics facilities respectively at the Shunyi Airport, Tongzhou Majuqiao, Fangshan Liangxiang, Pinggu Mafang and Daxing Jingnan. Beijing aims to achieve an annual growth of over 30% in the sales revenue of these five logistics bases, which will reach an amount of CNY50 billion by 2011 according to the plan.

Beijing also plans to invite 8 to 10 world-reputed logistics companies and 15 to 20 leading domestic logistics providers to set headquarters or branches in the city.

The city will also foster the growth of large local third party logistics providers, especially the top three to five seeds with an annual revenue of over CNY10 billion, as well as five to ten such companies with annual revenue of more than CNY500 million.

The city also plans to strengthen the ties between logistics and industry and commerce, to encourage manufacturers to forge cooperative ties with logistics providers.

The China National Bureau of Statistics has released the latest business confidence results that showed increased business confidence across all sectors except Social Services which dipped marginally.

Business Climate Index 2009/2010
	Last Quarter	This Quarter
Overall	124.4	130.6
Industry	120.5	128.1
Construction	134.5	140.5
Transportation, Storage & Telecommunications	116.9	117.8
Whole Sale, Retail Trade	136.0	141.4
Real Estate	126.3	133.6
Social Services	124.1	119.0
IT, Computer Services and Software	151.8	153.5
Hotel and Catering Services	115.1	121.6

Source: China National Bureau of Statistics, March 15, 2010

According to the latest Q4 RICS Global Distressed Property Monitor released in March, the number of distressed properties coming to market continues to rise globally.

Of the 25 countries surveyed, 18 reported a pick-up in the number of distressed properties on the last three months, but at a generally slower pace than previously reported.

Japan, USA, Spain, Ireland, Scandinavia all reported distressed property listings at a faster pace than in Q3. Interestingly, agents in China reported an increase in the number for the first time, following two quarters of declining activity. In contrast to this, Brazil, Hong Kong, Australia and India reported a drop in the number of distressed property listings compared to three months earlier.

Source: RICS

According to Cushman & Wakefield’s 2010 Global Investment Atlas, which monitors investment flows in commercial property in 56 countries, global investment volumes are forecast to rise 30% this year, hitting $478bn (€362bn), led by a reviving US market.  The new report, to be launched on 16th March at MIPIM property conference in France, suggests that this figure is likely to be even higher if the economic recovery remains on track. 

In 2009, global investment volumes fell 23% to $365bn (€270bn), their lowest since 2003. However as markets started to recover and global liquidity improved, investment volumes ended the year on a much stronger note – rising 104% between the first and second halves of the year.

The upturn was led by Asia Pacific and most notably China, with a 39% increase in investment on 2008. China is now the largest real estate investment market in the world, with the next most dynamic recovery market, the UK, up to second and the USA down to third place (if apartment sales are included in this figure the USA would take second place). 

Yields stabilised in most areas later last year as higher investor demand and limited supply impacted. The global average fell 20 basis points in the second half of 2009 to 7.8% and a further fall of 25-50bp is forecast for 2010.

Occupier trends

Global rents fell 5.7%, with the worst declines coming early in 2009. Nonetheless, cautious occupiers and rising supply point to a further 5% fall in H1 2010 before prime values stabilise later this year. Across all sectors global rents fell at an annual rate of 9.2% in the first six months but this slowed to just a 2.2% pa decline in the second half, with Asian Pacific retail, notably China, and Asian Pacific and Latin American offices, leading the stabilisation. With an uncertain economic recovery however, a demand-led return of rental growth is not yet in prospect although it is increasingly clear that not all markets will follow the same trend.

Top Investment Targets

With investment growing 143% last year, it is China which is now the active property investment market in the world.  Aside from the rise of China as a global market, the increasing dominance of Asia Pacific overall has been notable in the 2009 results. Eight of the world’s top 20 investment markets are now Asian Pacific and a number rose up the rankings last year, with Hong Kong, Taiwan and New Zealand seeing deal volumes rise while Australia and South Korea saw a much more modest decline than the global average.

Many investors are focusing on core, more liquid markets such as the UK, France and Germany in Europe or eyeing Canada now and perhaps the USA later this year.   However opportunities in today’s market are apparent in all regions. Brazil for example has come out of the recession looking if anything a stronger candidate for global investors and other emerging markets such as Poland and Turkey could be more highly regarded. Asia offers a range of mature and emerging market possibilities meanwhile, such as Australian and Singapore offices or Chinese retail.

Outlook for 2010

“While challenges clearly remain and a double-dip cannot be ruled out, a higher risk appetite among financiers and investors will continue to fire the market.” commented David Hutchings from Cushman & Wakefield. “With the recovery now backed by local and international players, we anticipate higher levels of activity and a total deal volume up 30% to $478bn (€362bn) this year. With investor demand for prime space running ahead of supply, yield falls will continue even without any signs of renewed rental growth. Overall, limited finance may hold back re-pricing in some areas but we still anticipate a 25-50bp fall in yields globally across all sectors, with Asia again leading the correction. Rents however are likely to drift lower and whilst they will end the year relatively stable, we anticipate a 5% fall globally, led by office property in most but not all markets.”

USA

One of the strongest increases in activity is expected in the USA, at around 50%. The ‘debt overhang’ and ‘job-free’ recovery mean that other than for the best assets, downward pressure remains on prices. However, this may create attractive buying opportunities in the second half as distress and refinancing needs emerge on the market.

With some investors sitting on a lot of cash after their recapitalisations, equity raisings and inward investment flows of last year, a strong turnaround in activity looks likely. The US market remains a Tale of Two Cities, divided between institutional sellers, who were on the sidelines in 2009, and distressed sellers  who have been reluctant to bring product to market and lock in losses.  As 2010 unfolds activity in both sectors should improve as pricing for well leased, core product purchased before the market peak benefits from large pools of frustrated capital, and distressed sellers begin to deal with a mounting volume of properties.

Asia Pacific

Asia Pacific saw its global market share increase to 59% in 2009, 80% higher than in 2008, and while Cushman & Wakefield is forecasting slower growth in 2010, of around 20%, globally it will remain in top spot. The two largest real estate markets in Asia are China and Japan.

China will continue to see vibrant investment activity, despite recent government measures to cool down the property market. Japan is looking increasingly compelling with a relatively high spread between yield and finance cost and with huge investment grade opportunities particularly distressed assets selling at below replacement cost. We are expecting opportunistic buying activity this year.

Source: Summary from Cushman & Wakefield

China is requiring a down payment for land purchases equal to 50 percent of a plot's price and prohibited the supply of land for villas as the government sought to increase affordable housing. The down payment must be paid within a month of signing a contract for the land purchase, the Ministry of Land and Resources said in a statement on its Web site. Buyers must also pay a deposit when taking part in land auctions that is equal to 20 percent of the minimum price for the land, according to the statement.

China's property prices rose at the fastest pace in almost two years in February, adding urgency to the government's efforts to rein in speculation and reduce the risk of asset bubbles, resurgent inflation and bad loans for banks.

Premier Wen Jiabao warned of "latent risk" in the country's banks in his speech to the annual meeting of top legislature in Beijing last week.

Residential and commercial real-estate prices in 70 cities climbed 10.7 percent from a year earlier, the statistics bureau said on its Web site yesterday. That topped a gain of 9.5 percent in January.

Container volume between Japan and China continued a steady growth in January led by strong demand for exports from Japan, registering the fifth year-on-year monthly rise.

According to statistics by the Shipping Conference and General Administration, containerized exports from Japan shot up 59.1% from a year earlier to 77,716 TEUs in January, while imports from China to Japan declined 5.4% on year to 147,277 TEUs after having registered a double-digit growth in December. Total volume for January rose 10.0% from the same period last year to 224,993 TEUs.

In related news, China's customs agency reported that exports rose in February in a new sign of growing global demand with exports up 45.7 percent over a year earlier. This beat analysts forecasts of 35 to 40 percent growth. Imports surged 44.7 percent, the agency said, reflecting growing demand in China as it emerges from the global crisis.

Expo Build China 2010

Date: Mar 29- Apr 1, 2010

Venue: Shanghai New International Expo Centre

Fair Name: Expo Build China 2010

Description: Expo Build China 2010 is one of Asia’s leading premium building, ceramics & design shows that focuses on the latest and most effective as well as innovative building materials. Target audience includes real estate, large-scale industrial projects, property developers, architects and design studios. Providing a “Multi-Direction, One-Stop-Shop” platform and establishing a high-quality building materials’ communication channel to all buyers and visitors is the passion and intention of Expo Build China 2010.

URL: http://www.expobuild.com/

According to a recent Accenture study, the downturn has seen a reduction in the focus on carbon initiatives with more than half (67%) of survey respondents turning to traditional cost-reduction initiatives.

The companies that have lost focus on green initiatives during the downturn however could be at greater risk of supply chain problems in the future. Companies that were leaders on sustainability by having green supply chain initiatives also had improved cost effectiveness and good customer service.

Delivering cost-justifiable carbon initiatives need not be complex, Accenture said. Typical cost-and-carbon reduction tactics include route optimisation to improve load factors, reduced empty-running, and seeking out new operating synergies.

Source: www.accenture.com

Major brands increase e-tail presence

中文版

多数的世界著名品牌强化网上营销。

很多喜欢Levi和Mattel等世界著名品牌的消费者开始在网上直接从品牌生产商手中购买商品。为了更好的适应这个趋势，多数以美国为根据地的著名品牌公司专门为节约开支的消费者们创建网站，强化各自的网上营销系统。而世界上最大的零售公司沃尔马则更加热心的创建属于自己的品牌，仅去年一年就开发并销售了80余个品种的商品。

Louis Vuitton awards Kuehne + Nagel Japan warehouse contract

Tokyo, March 08, 2010 - Louis Vuitton Japan, a subsidiary of the LVMH Group, one of the world’s most prestigious companies in the retail industry, has awarded Kuehne + Nagel Japan a contract for the management of its regional distribution centre in Osaka.  The warehouse is 5,600 m2 and based on the systems and processes customised in this facility, Kuehne + Nagel will further be responsible for setting up showcase warehouse operations for all of Louis Vuitton’s outsourced distribution centres worldwide.

中文版

路易・威登决定和Kuehne + Nagel Japan签订仓库租赁合同。

2010年3月8日，世界超一流的服饰公司路易・威登集团的子公司--路易・威登日本，决定和Kuehne + Nagel Japan签订位于大阪的区域配送中心的租赁合同。这个仓库占地5,600平方米，内部设备齐全。Kuehne + Nagel Japan还将进一步为路易・威登提供仓库的所有运作以及全球范围的外部配送业务。

China's cargo figures up 68% in Feb

Official Chinese figures say China's cargo and mail throughput was 450,726 tones in February, up 68.2 per cent year-on-year, while air passenger traffic increased about 18 per cent year-on-year in the first two months of 2010 and by 59 per cent in February alone.

2010年2月中国的货物交易量上升了68个百分点。

根据中国政府的统计数字显示，2010年2月中国的货物交易量及宅急便量达到450,726吨，比去年同期增加了68.2%。而2010年前两个月的数字显示，空运量比去年增长了18%，单单2月份一个月就增加了59%。

SWITZERLAND, March, 2010 - Despite the global economic crisis, the Kuehne + Nagel Group delivered solid results in 2009 and gained market share in all business units.

While turnover decreased by 19.4 % to CHF (Swiss Francs) 17,406 million, gross profit of CHF 5,863 million was just 6.2 % below the previous year. Including an extraordinary provision of CHF 35 million related to competition investigations, net earnings decreased by 20.2 % (14.2 % excluding provision) to CHF 467 million. 2009 dividend will be same as in 2008.

Datasheets

Consolidated Financial Statements 2009

Karl Gernandt, Executive Vice Chairman of the Board of Directors, said “The good performance of the Kuehne + Nagel Group in the crisis year of 2009 was due to its operational strengths and the timely and consistent execution of its strict cost management and commitment to market share expansion. Thus, we were able to considerably strengthen our global market position. In addition, we took advantage of the crisis to further improve organisational and operational efficiencies in line with our profitability objectives.”

Market share gains and strong operational performance
Market share gains experienced in all business fields with an increase of EBITDA margin from 4.7% to 5.1%

Seafreight
In 2009 the seafreight business was caught in world recession. Worldwide volumes fell for the first time in global containerisa­tion history. Kuehne + Nagel, however, managed to win market share and strengthened its position as global market leader. A 4.6% volume decline was remarkably moderate compared with the approximately 12% decline in overall market seafreight volumes. EBITDA margin increased from 4.6% to 5.0%, while the operational result decreased by 17.9%.

Airfreight
The global airfreight market experienced an unprecedented slump in demand beginning in the fourth quarter 2008, a situation that did not stabilise until July 2009. For the whole year, the airfreight market declined by 12 % where as Kuehne + Nagels decline was 9.2 % and was therefore able to take the third place in the ranking of global airfreight forwarders. EBITDA margin remained stable at 5.6% (previous year: 5.7%), the operational result decreased by 28.1%.

Road & Rail Logistics
Kuehne + Nagel was able to partly compensate for the substantial fall in European road transport volumes through market share gains in fields of full truckload (FTL) and less than truckload (LTL), along with solid business performances in Germany and France. Compared with the previous year, EBITDA margin increased from 0.8% to 2.1% % and the operational result improved by 126.1%.

Contract Logistics
Thanks to ample order for industry-specific solutions and strict cost management Kuehne + Nagel achieved stable contract logistics results. EBITDA margin remained at the previous year’s level of 4.6%, while the operational result decreased by 6.9%.

Real Estate
Kuehne + Nagel optimised its portfolio consisting of properties and leasehold premises. At the end of 2009, the freehold portfolio comprised 123 logistics facilities and office buildings in 21 countries.

Turnover
The largest turnover decreases were recorded in:

• Americas: 25.0%;
• Asia-Pacific: 22.6%;
• Europe: 18.5%;
• Middle East, Central Asia & Africa: 6.1%.

Gross profit
Gross profit declined by 6.2% despite a negative currency effect of 7.5%. Acquisitions had a positive effect of CHF 382 million.

• Middle East, Central Asia & Africa: 3.8 % decrease;
• Europe: 4.2% decrease;  
• Asia-Pacific: 11.5% decrease; &
• Americas: 14.6% decrease.

Operational result (EBITDA)
Earnings before interest, tax, depreciation and amortisation of goodwill and other intangible assets (EBITDA) decreased by CHF 135 million (13.2 %) compared with the previous year.

Result by region

• Europe: (CHF 579 million resp. 65.4 %), 
• Asia-Pacific region: (CHF 140 million resp. 15.8 %),
• Americas: (CHF 128 million resp. 14.5 %) and
• Middle East, Central Asia & Africa: (CHF 38 million resp. 4.3 %).

Outlook
The Kuehne + Nagel Group is emerging from the crisis year 2009 stronger than before and is well positioned for the expected economic upswing. As there is some uncertainty regarding a lasting global economic recovery, the Group will adhere to its strategy of market share expansion combined with strict cost management.

Chief Executive Officer Reinhard Lange said: “Our aim for 2010 is profit­able growth above market average in all business units. In addition, we will further enhance our product offering, develop new areas of value creation and increase our service quality to make Kuehne + Nagel an even more attractive logistics partner for companies in trade and industry.”

Source: Summary of original Kuehne + Nagel release

According to the latest edition of Fortune magazine, UPS tops the list of most admired delivery companies. Interestingly, FedEx placed 13^th in the overall most admired companies ahead of UPS in 33^rd place.  

Japan’s Nippon Express was placed 6^th in the delivery industry and Japan Post placed 8^th.

Rankings were based on FORTUNE magazine survey which asked businesspeople to vote for the companies that they admired most.

Ryder, a global supply chain company was recently awarded number 1 position for its excellence in security within the logistics and warehousing sector.

In its most comprehensive security ranking for top corporate, institutional, and government organizations, The 2009 Security Benchmarking Survey, published in Security Magazine , a leading industry magazine examining security threats and solutions, has ranked Ryder (NYSE: R) as number one for security practices in the Transportation, Logistics, Supply Chain, and Warehousing industry sector.

Click here for a complete list of all sectors in Security 500.

BEIJING: FedEx Corporation is forging ahead in China, one of the fastest-growing e-commerce markets in the world. The Chinese online shopping market is experiencing strong demand from local consumers as companies' refocus on the home market in the face of the global financial turmoil.

To make an inroad in China, FedEx has cut its price and launched a series of marketing campaigns to lure online store runners in the country.

David L. Cunningham Jr., president of FedEx Express Asia-Pacific, said the company is principally dedicated to the delivery of high value products like personal computers, telecom equipment, and semiconductors in markets out of the country. Fedex is looking to expand product delivery to meet diversifying demand in China. In China sales of daily commodities like mobile phones, apparels, drugs, and cosmetics appear to be extraordinarily robust in the online market.

Fedex became the recommended logistics service provider on Taobao.com, a consumer-to-consumer (C2C) e-commerce platform under the arm of Alibaba Group, at the beginning of 2009.

Moonbasa.com, a Guangzhou-based underwear retailer that derives 90% of its revenue from online sales, has made FedEx its exclusive logistics service provider, placing more than 5,000 orders every day.

Online shopping contributes to one third of the sales revenue for express transportation service providers in the country, said the State Post Bureau, noting that deliverers witnessed over 500 million packages from the online shopping market in 2008. Statistics from Taobao.com showed that the number of orders for package delivery from storeowners on Taobao.com had grown to 3 million every day by June 2009 from about 2 million in 2008.

According to recent reports, more than 30% of the online shop owners in China are expected to turn to high-end service providers such as sf-express.com and FedEx within two years. At present, plenty of the express transportation service providers in China are focusing on the online shopping market, generating over 60% of their revenue from that sector.

(Guangzhou) International Environmental Protection Exhibition

• Date: 9-11^th June 2010
• Location: China Import and Export Fair Pazhou Complex Guangzhou China
• Description: Enviro Guangzhou 2010 will open on 9th-11th June, 2009 in Guangzhou China. With three equally important themes of "Energy-Saving, Comprehensive Utilization, Low Carbon Economy", Enviro Guangzhou 2010 will emphasize the energy-saving products and techniques applied in buildings, new energy such as solar energy and wind energy, and comprehensive utilization of resources, along with the displaying of traditional techniques and equipments of wastewater treatment, air pollution control, noise pollution control, and waste treatment.With the success of last years event, Enviro Guangzhou will have a total exhibition area of 12,000 square meters and 250 companies from mainland China, Italy, Japan and Sweden. More than 15,000 trade visitors and buyers are expected to visit.
• URL: http://gziepe.fairwindow.com/en/

In the next five years, the world will see all of its top 10 real estate developers coming from China, real estate tycoon Wang Shi predicted at a real estate and entrepreneur forum on Sunday 28th February.

Wang, chairman of China Vanke Co, the country's largest property developer by market value, made the remarks at the closing ceremony of China Entrepreneur's Forum, held in Yabuli, Heilongjiang province.

Wang said it's hard to make predictions on this year's property market as there are many uncertainties, pointing out that a bubble is probable due to the large quantity of new money supply last year. But he said he is certain of an upward trend in the following three years. As an industry leader, Wang's comment is closely watched by the media and fellow developers.

2010 will be a good year for investment into commercial property across most markets, LaSalle Investment Management (LaSalle), a US real estate fund with $40 billion under management, said today.

Third-party logistics providers (3PLs) worldwide are forecasting lower growth, except China which has been identified as a melting pot of logistic opportunities.

3PLS in Asia-Pacific, US, Europe and Latin America are entering 2010 with lower growth expectations. 3PLS in Asia-Pacific and Europe that reported layoffs in 2009 are averaging work force reductions of 9% and 12% respectively said The Journal of Commerce magazine.

3PLs in all the regions can also expect to capture a bigger share of overall logistics spend as expenditures on outsourcing in the Asia-Pacific region, as a percentage of total logistics costs are expected to rise to 65% by 2011 and 70% by 2014.

Logistics is a key industry cluster in China's long-term ongoing economic development plans, says the China Federation of Logistics and Purchasing.

Based on China's 11th Five-Year Plan, logistics costs, including transportation, storage and management account for 18.3% of the nation's GDP, and that is approximately twice as much as in the US and European Union.

The logistics sector has grown by an average of 14% annually for most of the past decade and total revenue from the nation's logistics industries grew 20% year on year in the first nine months of 2009, reported the National Development and Reform Commission.

With a 40% annual growth rate in demand for time-definite logistics services, there are huge opportunities for foreign and domestic 3PLs in China. Foreign 3PLs with carefully crafted strategies can succeed in China's highly fragmented market. It is estimated that over the past decade, foreign 3PLs have captured nearly 80% of the nation's time-sensitive export logistics business.

In the world’s busiest container port rankings, Chinese ports held seven places of the top 10 in 2009. The top three – Singapore, Shanghai and Hong Kong – remained unchanged. Qingdao rose from 10th to ninth on the list, while Rotterdam went down from ninth to 10th.

As for the top three in 2009, Singapore won first place, handling 25.866 million TEUs (down 13.5 percent from 2008); Shanghai, second, 25.002 million TEUs (down 10.7 percent) and Hong Kong, third, 20.925 TEUs (down 14.6 percent).

Ranked fourth place was Shenzhen, which processed 18.25 million TEUs (down 14.78 percent), which was followed by Busan, 11.98 million TEUs (down 11 percent).

Source: JIFFA

China - UPS launched its inaugural flight at the new UPS Shenzhen Asia Pacific Hub, the company's newly moved intra-Asia hub from its former site in Clark, Philippines.

"The inauguration of our flights in Shenzhen is part of our continued efforts to help our customers execute their trade in the region more efficiently," said Derek Woodward, president of UPS Asia Pacific. "As part of this strategic move, UPS's existing intra-Asia hub operations at Clark will be refocused to serve as the main import and export gateway for the Philippines as well as to continue its role as a leading centre for our service parts logistics operations."

Intra-Asia trade is expected to grow at an annual average rate of 12.2% until 2020, compared to Asia's trade with the US, projected to grow 7.3% annually over the same period.

Topic: Global Real Estate Market after the Financial Crisis

• Hosted by: (JARES) Japan Association for Real Estate Sciences
• Supported by: The Association for Real Estate Securitization (ARES)
• Time & Date: Friday, 12 March 2010 15:00-17:00
• Venue: Room 7091 (9F), Bldg. 7, Department of Economics, Nihon University, 2-8 Misaki-cho, Chiyoda-ku, Tokyo

• Number of Participants: 70 (on a first-come-first-served basis)
• Registration Fee (Material Fee): JARES members & ARES members - 1000 yen, Others -3000 yen. Please pay the registration fee at the registration desk on the day of the seminar. To register contact Ms. Matsueda of JARES on 03-3213-1844 or email jares@js4.so-ne.jp

Program:

15:00-15:05: Opening Remarks by Chairman of JARES