APLÆs Sappio: 2008 ôa tough yearö
While the 2007 peak season is just in full swing, Bob Sappio, senior vice president of APL, sees 2008 looming.
“2008 is going to be one hell of a tough year for our industry,” Sappio said at a press conference Friday, announcing the new Suez Express service connecting Southeast Asia and the U.S. East Coast via the Suez Canal. APL is a unit of NOL.
Sappio pointed to three challenges that liner companies will have to grapple with in the coming year:
' An earlier-than-normal Lunar New Year holiday. “Things are going to back up quickly after Christmas,” he said. “We will get out of peak season in October of this year, but January is going to be busy.”
' Contract negotiations with the International Longshore and Warehouse Union. He noted that negotiating a new contract this summer with the Office Clerical Unit of the ILWU this summer “was not an easy task, but an arduous task.”
' The timing of the Olympic games and how they will effect production and transportation. Sappio said there are unconfirmed rumors that some factories in northern China may be shut down to improve air quality for visitors to the games in Beijing. If factories closed for a week or two around the August, which is the beginning of peak season, what will that do to cargo volumes? Will it shift to South China? Will some carriers void sailings? Those questions are unanswered, he said.
Sappio also noted that, while West Cost ports are functioning smoothly this year, “the velocity of rail is down significantly over the last few of years. If much more cargo comes through the system, then we are going to have things grind to a much slower level of service than we are seeing today.”