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Nov.24, 2014

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ATTACK TRIGGERS FEARS OVER SUEZ CANAL SECURITY AN ATTACK ON an Egyptian Navy patrol boat near the Suez Canal by four boats on Nov. 12 reignited concerns about terrorism on merchant shipping along the 120-mile-long waterway. The Egyptian Air Force destroyed the attacking vessels, killing four gunmen and leading to the capture of 32 people, according to reports. The unidentified gunmen, described by the military as "terrorists," undertook the first attack on the Egyptian Navy in decades, according to Egypt's official Al Ahram newspaper. "Delays in the Panama Canal expan- sion and energy exports from the Middle East make global commerce reliant on Suez. Yet this recent attack and some of the violence we have seen around the canal shows that this area is not immune from Egypt's instability," Robert Shelala II, a supply chain security expert and author of a recent report on maritime security in the Middle East, told The Journal of Commerce. "I think any further instability in and around the canal ca n have a rea l impact on shipper c on f ide n c e a nd insurance premi - ums at a time when shippers rely on the canal — to say noth- ing of the issue of physical security for ca rriers," he said. The Egyptian military increased security in late 2013 after terrorist attacks rose in the wake of the mili- tary's overthrow of the Morsi regime in the spring of that year. The launching of rocket-propelled grenades against the Cosco Asia while it transited the canal on Aug. 31, 2013, shook the container shipping industry after a YouTube video of the attack went viral. The Chinese container line said its vessel wasn't damaged. SECOND REEFER RAIL PROVIDER PUTS OPERATIONS ON ICE ANOTHER REFRIGERATED RAIL provider called it quits this month, further reflecting how the potential for growth in the sector is matched by steep challenges. After five months serv- ing perishable shippers via boxcar operations between Selma, California, and Wilmington, Illinois, McKay TransCold closed on Nov. 1. The company cited inadequate cross-dock operations provided by an undisclosed logistics provider. Although McKay had to deal with its own glitches, operational issues on the cross-dock side was the linch- pin that prevented the service from providing major perishable shippers the level of service they required, Jason Spafford, McKay Transcold's former vice president of business development, told The Journal of Commerce. Spafford emphasized that BNSF Railway wasn't to blame, and said the railroad's transit times were consistently on time. ColdTrain, a provider of nationwide reefer inter- modal transport from Washington state, blamed poor BNSF service for having to end its service in August. AIR CARGO REBOUNDS, BUT WILL GROWTH LAST? THE STRONG REBOUND in trans-Pacific trade will ensure the air cargo industry enjoys a festive season this year, but few are prepared to forecast that the robust growth will continue much past Chinese New Year in mid-February. With up to three weeks remaining in the peak season, volumes remain buoyant. Still, some air cargo executives, mindful of the years of poor yields, parked freighters and unpleasant balance sheets the industry has endured, are wary of being too optimistic too far into the future. "I expect that market to remain strong right up until Christmas, and am also cautiously optimistic that 2015 will start strongly with good loads up until Chinese New Year. After that, my crystal ball goes a bit hazy," said James Woodrow, Cathay Pacific's direc- tor of cargo. Aside from the seasonal demand, carriers are enjoying increased demand caused by shippers shifting some trans-Pacific ocean freight to the air because of crippling U.S. West Coast port congestion. Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics, said available air freight space to the U.S. had reached critical levels and costs have skyrocketed. "It looks like the situation in Los Angeles is not going to be resolved quickly, and I can see demand being strong until the third or fourth week of December," he told The Journal of Commerce. He warned that the situation could deteriorate further. Spotlight 6 THE JOURNAL OF COMMERCE NOVEMBER 24.2014 6 THE JOURNAL OF COMMERCE "This recent attack and some of the violence we have seen around the canal shows that this area is not immune from Egypt's instability."

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