Transport unions, don’t blame us: Woolworths

While the trucking industry continues to attack major retailers arguing they are refusing to pay fuel levies to drivers, Woolworths has said the industry is wrongfully placing the blame on the company.

Following a union-led protest staged at Rosehill, Woolworth has issued a statement saying the Transport Workers Union (TWU)’s claim against the company was “unfounded”.

“Contrary to TWU spin, Woolworths pay appropriate national fuel levies to all its transport providers and these are reviewed on a regular basis,” it said.

“Woolworths understands that there is genuine hardship across the transport industry and it is our expectation, and our transport providers’ responsibility, that these fuel levies are passed onto any drivers who are subcontracted by our direct transport providers.”

TWU has previously stated the major retailers like Coles and Woolworths increase the costs of goods using the rising fuel costs as an excuse, yet the levy is not passed down the transport chain to the drivers.

Woolworths added it recently wrote to its major transport providers requesting their assurance that they treat their subcontractors fairly regarding the issue.

It said while the company’s transport costs have soared, its extensive management strategy has enabled it to keep the food price inflation level at 2.9 per cent, below the national figure of around four per cent.

“As a company that depends on transport, Woolworths accepts that higher fuel prices are a fact of life and is investing heavily in more efficient technologies and trialling alternative fuels.

“Innovation and best practice leadership in transport are the direct result of investments made by major businesses such as Woolworths.”

The company said the industry needs to stop playing the blame game over fuel prices, and start to collaborate.

“All sectors of the logistics industry must work together to ensure that we can meet the challenges ahead rather than unfairly placing blame on selected participants,” it said.

More room for National Storage

Storage operator National Storage has expanded its network, adding three sites in Hobart and becoming the first Australian major operator to set its foot on the Apple Isle.

The $17 million transaction netted National Storage 10,700 square metres of space in established sites owned by Scobie Storage Centres, which are located at suburban Moonah, Mornington and Montrose.

The acquisitions lift the number of centres operated by the company to 60 located across all states of Australia, comprising around 290,000 square metres of net lettable space.

Managing director of the Brisbane-headquartered National Storage Andrew Catsoulis said the Hobart centres were valuable additions to the steadily growing network.

“Despite changes in the economic climate over the last six months, we remain committed to continuing to grow our business through strategic acquisitions, such as the Hobart centres.

“While it is a small market in comparison to the mainland states, Tasmania, and particularly Hobart, is showing growth in the storage sector, which we intend to capitalise upon.”

According to Mr Catsoulis, space within the three Hobart centres was currently 81 per cent occupied.

He said there was a strong linkage between the national trend towards sustainability and storage as a practical, cost and resource efficient method of managing and maximising space.

“From a domestic point of view, compact storage units reduce the need for extra storage space in homes for items such as boats, cars, household items and collections, while the potential to store commercial records, files and point of sale merchandise off-site can reduce leasing costs and minimise on-costs such as lighting and air-conditioning,” Mr Catsoulis said.

Forklifts to run on hydrogen fuel

In a move to find alternative energy sources for forklifts, a US-based trial program will see military forklifts refitted with hydrogen fuel cells.

The two-year demonstration program, delivered by technology developer Concurrent Technologies Corp (CTC), will run 20 forklifts on the renewable hydrogen fuel to implement clean technology into the warehouse environment.

Last month, the Defense Logistics Agency (DLA) began the fuel cell forklift pilot project on Robins Air Force Base in Georgia as the second in a series of research and development demonstrations.

Forklifts now operate on traditional rechargeable batteries and onsite operators will reform natural gas to extract the hydrogen for the project.

CTC of Johnstown, Pennsylvania is collaborating with hydrogen supplier Air Products and Chemicals Inc and the Canadian fuel cell power product creator Hydrogenics Corp to complete the retrofit process.

According to the companies, an immediate operational benefit is eliminating the extensive process to recharge batteries, with a mobile refueller expected to complete the process much quicker with hydrogen.

Government rebuffs Avalon’s upgrade proposal

The Federal Government has rejected Avalon Airport’s plans to upgrade the airport for international flights.

The proposal, put forward by LinFox, the Melbourne-based airport’s operator, outlined the $41 million project to improve the facility to cater for planes arriving from Asia and Europe.

The Government has rebuffed the proposal on planning grounds but the airport would continue to push for approval, Avalon’s general manager Tim Anderson told the ABC.

“We’re very disappointed. We’ve put in a lot of work over the last year and more, have done a lot of foreign travel and done a lot of work on the concept to date, but we don’t think tis’ wasted money,” he said.

“We will continue to work on the project, and hopefully see it come to fruition later this year.”


Qantas to slash international services

Following adjustments in its domestic services, Qantas has announced changes to its international services to manage the impact of soaring oil prices.

The airline’s chief executive officer Geoff Dixon said the cost of fuel had forced the company to restructure its business over the next two years.

“We have to look closely at each individual market, including the number of frequencies we operate and which of our flying businesses is better suited to serve those destinations,” Mr Dixon said.

The changes will most affect its services to Japan and South East Asia, with the withdrawal of its thrice-weekly Melbourne-Tokyo return services and a reduction in Sydney-Tokyo return services from this September, and the replacement of its 14 weekly Cairns-Tokyo services with a daily Jetstar non-stop service from this December.

To supplement the schedule changes, Jetstar would exit its Sydney-Kuala Lumpur operation to make an A330 aircraft available, and replace Qantas on the Perth-Denpasar and Perth-Jakarta routes.

Mr Dixon said the airline’s pilot base in Cairns would close, with around 40 pilots returning to Sydney or other bases, but maintain its existing cabin crew base in the location.

As a result of the international schedule changes, he said there would be a small number of job losses in Cairns and Japan, in addition to those flagged in last week’s announcement, and would also be managed initially on a voluntary basis.

Mr Dixon said : “Qantas had done everything possible to mitigate the effects of the schedule changes we have been forced to make.

“We will continue to work with individual markets and look for opportunities as conditions improve to address capacity issues and reinstate services where and when we can.”

QR boosts intermodal by $200 million

Transport and logistics company QR has announced plans to inject $200 million into its intermodal business for new rolling stock and freight terminal upgrade projects.

The investment is expected to further expand the company’s involvement in the $1 billion general freight market, which has been boosted by the start of its services from Melbourne to Perth last November.

Speaking at a rail infrastructure conference in Sydney, QR chief executive officer Lance Hockridge said the Queensland Government has approved the expenditure.

“This investment underlines QR’s commitment to the national intermodal market and our ambition to expand the business over time to leverage off the growth opportunities,” he said.

Mr Hockridge said the $200 million project includes the purchase of 18 new locomotives and 488 wagons, and the upgrade of the terminals at Perth’s Forrestfield and Dry Creek in Adelaide.

The company’s executive general manager freight Stephen Cantwell said general freight volumes between capital cities were projected to double between 2000 and 2020 due to rail’s relatively low carbon emissions and rising costs for road transport.

Mr Cantwell said the upgrade project would improve QR’s cost competitiveness by enhancing fuel efficiency and reliability and provide the company with the capacity to increase volumes and realise economies of scale.

The company plans to call tenders for the new rolling stock next month, which will be used to update its fleet by 2010.

Air New Zealand to fly on biofuel

Air New Zealand has announced it will be the first airline in the world to use biofuel extracted from the plant jatropha when a test flight takes place later this year.

In the race to become the world’s most environmentally sustainable airline, the company also said it expects to replace at least one million barrels of fuel, equivalent of 10 per cent of its annual fuel needs, with biofuel by 2013.

Chief executive officer Rob Fyfe said: “Air New Zealand is absolutely committed to being at the forefront of testing environmentally sustainable fuels for use in aviation and we are confident that our hard work with partners like Boeing…will see a step change sooner than many people realise.

“Studies have already shown that sustainable fuels can lead to a significant reduction in carbon emission with a 40-to-50 per cent lower carbon footprint on a lifecycle basis.”

The airline expects to conduct the test flight with the airline’s Boeing 747-400 Rolls Royce using fuel sourced from jatropha, depending on final regulatory approvals and testing by the engine manufacturer.

Jatropha, a plant that grows in south-east Africa and India, produces seed that contains inedible oil that can be converted into fuel.

Mr Fyfe said the airline has been non-negotiable about the three criteria – social, technical and commercial – any alternative fuel must meet for its test flight program.

“Jatropha satisfies all our criteria and furthermore, it is likely to be available in the necessary commercial quantities to meet our needs within five years,” he said.

“We have already had offers from organisations in Asia and Africa willing to guarantee enough supply to meet our 2013 target.”

He said using the biofuel could be a cost-effective option for the aviation industry as costs for jatropha are 20 to 30 per cent lower than oil prices.

The airline is also considering using algae-produced biofuel for testing.

Mr Fyfe said the company is seeking partnerships to build a suitable supply chain model.

“We are quite open to working with like-minded partners, including the New Zealand Government, on the development of refinery and delivery opportunities,” he said.

Supply Chain Asia names its visionary

Supply Chain Asia (SCA), a 12,000 member supply chain community that promotes the development of Asia’s supply chain and logistics sector, recognised HH Sheikh Ahmed bin Saeed Al Maktoum, chairman, Dubai City of Aviation Corporation – Dubai World Central with the Supply Chain Visionary of the Year award in Hong Kong.

“This award is recognition of Dubai’s leadership in providing innovative solutions to the transportation and supply chain industry’s evolving development strategy, and to the people who have made this dream come true,” commented Sheikh Ahmed.

The Supply Chain Asia Logistics Awards recognises the development of the transportation, logistics and supply chain sector among corporations and individuals. The awards are decided through an online ballot process of the Supply Chain Asia community as well as through the Supply Chain Asia magazine readership.

“The fundamental objective of the awards is to recognise and applaud the logistics industry in Asia,” said Turloch Mooney, Managing Director, Editorial, SCA Publications. “With the imminent opening of Dubai Logistics City (DLC) – probably the world’s first true multi-modal supply chain platform in Dubai, Sheikh Ahmed was the obvious choice for the 2007 Supply Chain Visionary of the Year Award.

“His current role in the creation of what may very well be the future master blueprint for modern supply chain infrastructure is appreciated world wide.

“Sheikh Ahmed’s vision is the perfect metaphor for the ongoing convergence of supply chain services and infrastructure into an integrated whole, and demonstrates his deep understanding of the forces of globalisation and the role of supply chains as a key determinant to meet challenges and opportunities.”

Dubai World Central (DWC), the 140 square kilometre urban aviation, logistics and residential community under development in Jebel Ali, is a pioneering concept in creating a business and trade hub with minimum transportation lead times.


Photo: (L-R): Abdulla Al Falasi, DWC’s director of marketing and corporate communications; Michael Proffitt, CEO of DLC; HH Sheikh Ahmed and Khalifa Al Zaffin, executive chairman, DWC





Qantas-BA merger hits turbulence even before takeoff


Qantas is likely to continue the merger talks despite an overwhelming amount of scepticism.

Proudly-Australian airline Qantas’ merger talks with British Airways (BA) have generated hostile reactions, signalling a bumpy road ahead.

The merger speculation surfaced as BA revealed talks were underway to explore a potential merger via a dual-listed company structure, following Federal Transport Minister Anthony Albanese’s revelation that he’d allow foreign investors, including airlines, to take a stake of up to 49 per cent in Qantas.

Qantas, the world’s 10th biggest airline, also confirmed the negotiation, but said “there is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate.”

Fuelled by the news, Qantas shares experienced a short-lived increase of nearly 10 per cent to $2.46.

The deal is expected to create a company worth more than $8 billion. While Qantas’ market value is somewhat higher than that of BA, it is understood the companies are considering taking a half each in holdings.

BA, which was forced to sell its considerable shareholding in Qantas when faced with choking debt, is also reportedly continuing merger talks with Spanish airline Iberia. The consolidation of the three carriers will create the world’s biggest airline, comfortably beating American Airlines.

The move is in line with the argument put forward by Qantas former chief executive Geoff Dixon, who has been making headlines regurgitating the need for consolidation as a survival option for the beleaguered airline industry.

It is also speculated the merger would encompass Qantas’ budget offshoot Jetstar and the freight division.

Australian, it is and will be

The foremost impediment to the merger process would be Qantas’ obligations under Australia’s international Air Services Agreements and the Qantas Sale Act, which stipulates a cap on foreign ownership at 49 per cent and total foreign airline ownership at 35 per cent.

The Act also demands the carrier’s main operational base and headquarters must remain in Australia, and it must be Australia-incorporated, with at least two-thirds of the Qantas board and the board chairman to be Australian citizens.

The Government was quick to denounce the deal, saying it would not stand by the proposal. 

“The Australian Government believes in an Australian-based and majority Australian-owned Qantas.

“At no stage as the Government indicated support for any proposal – in principle or otherwise,” Mr Albanese said in a statement.

The government went further, pre-emptively indicating it would not support any foreign mergers of other Australian airlines including Jetstar, V Australia and Pacific Blue, as well as all Australian international freight operators such as Heavy Lift Cargo, Tasman Cargo and Express Freighters.

Mr Albanese reaffirmed the Qantas Sale Act would remain unchanged except for the review of the additional ownership restriction, and stressed retaining national airlines was imperative for economic growth and national security.

“The Government is committed to growing a strong Australian-based aviation industry and Qantas is a key part of Australia’s aviation future,” he said. 

Dogged pursuit of consolidation

Despite facing a massive backlash, Qantas is likely to remain firm on its stance favouring consolidation with an aim to create a transcontinental airline.

Qantas made an attempt to merge with Malaysia Airlines earlier this year but the move was muddied by disagreement over management issues. 

According to media reports, the Australian airline also wants to join forces with Hong Kong carrier Cathay Pacific, a starter in the emerging Chinese market with a 20 per cent stake in Air China.

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