From: David Hickmott [DHickmott@uli-atl.com]

Sent: Friday, April 18, 2008 7:58 PM

To: David Hickmott

Cc: David Hickmott; David Hickmott

Subject: Transpacific lines get "serious" about fuel recovery in contracts

Dear Valued Unique Customer,

I wanted to take this opportunity to thank you for your support of Unique Logistics International (ATL), Inc for the 07/08 contract season. 

The below article is from recent American Shipper.  The article outlines/updates the contract process and the carriers intent to impose a floating fuel for cost recovery as well as the TSA guidelines for GRI and PSS.  During this last trip to Asia, the same was reiterated by most carriers in meetings.  At present, the ocean contract season for most accounts including the large BCO’s (i.e. Wal-Mart, Target, Toys R Us, Home Depot to name a few) with the carriers has been very slow with only about 20% of the BCO’s complete.

Between now and the beginning of May, we will be preparing diligently for the upcoming 08/09 contract renewals.  To ensure a smooth turn around once contracts are completed, we are planning to update the rates for the ports/points that moved cargo in this past year.  If we can condense the list to only what is necessary, then this will make the process once contracts are complete go smooth and efficiently, as we know everyone will be anxiously awaiting their new rates.  As always, we can add origin/destination points as well as alternative carrier options throughout the year as your business evolves.  We appreciate everyone's patience while we are completing this task in May.

Consistent with previous shipping seasons, the bookings for April are elevated due to many shippers and importers are trying to ship cargo prior to the May 1 GRI (General Rate Increase).  From some markets (i.e. Central and North China Ports), the vessels are already over-booked for weeks 16, 17 and 18.   For this reason, we are requesting our customers to make sure that the vendors are booking a minimum of 10-14 days in advance to secure the necessary bookings with the ocean carriers.  However, please be aware that space booking can be tight during this time and the ocean carriers have the ability to roll bookings from one weeks sailing to the next.

If cargo is received at the carrier origin CY, prior to May 1, 2008, then the previous rates will apply.  For cargo received at carrier origin CY on/after May 1, 2008, then cargo will be rated at the new quoted rate or previous rate plus market adjustments.  Once contracts are complete, our sales and pricing team will be working to update our customers rates as quickly as possible with moving freight as a priority.

Unique Logistics International appreciates your support of our services.  Your patience and understanding during the ocean contract season is greatly appreciated.  Thank you for being our valued customer!   

Thank you for your support of Unique Logistics International.  We appreciate and value your business!

Best Regards

David Hickmott - Executive Vice President

ph#404-767-0500 (ext 306)

Mobile# 678-478-6604

Fax# 404-767-3319

Transpacific lines get "serious" about fuel recovery in contracts
Transpacific Stabilization Agreement ocean carriers have reported significant rate increases in the first round of service contracts signed by U.S. importers, in what the TSA describes as a "relatively slow contracting season."
   The TSA said there has also been progress in achieving staged bunker surcharge increases closer to the agreement's full formula levels, and provisions allowing for monthly adjustments to match fluctuations in the global fuel markets.

Widdows

   "Admittedly, the carriers have sent mixed signals to the market in the past about whether we were truly serious in addressing revenue and cost issues in our pricing," said Ronald D. Widdows, TSA chairman and chief executive officer of Singapore-based carrier APL. "Understandably, shippers were holding back to see if this time we’re serious. I think it has become apparent that our industry faces a financial crisis, that past concessions on rates and fuel surcharges have now come back to affect service levels and carrier viability, and that yes, this time -- out of necessity -- the lines are quite serious."
   Widdows said the weighted average bunker fuel price in the transpacific topped a record $543 per ton on April 14, as highway diesel fuel crossed the $4 per gallon threshold for the first time.
   To highlight the container industry's disciplined stance towards getting the desired rate increases and fuel compensations, the discussion agreement said that individual carriers have advised shippers that existing contracts will not be extended beyond their April 30 expiry date in order to complete negotiations or allow for additional shipments. In those cases, cargo tendered by customers on or after May 1 will begin moving at tariff rate levels.
   "TSA carriers have sat down with customers and run the spreadsheets, showing the impact that fuel price volatility has had on their own individual sailings," Widdows said. "These are real costs that have been accrued over time and fully paid in other trade lanes. Carriers want to build as much pricing stability as possible into their contracts, but our largest single operating cost has nearly doubled in three years -- price certainty over the next 15 months in the current oil market is simply unrealistic for any of us to expect."
   In addition to re-establishing full, floating bunker surcharges, TSA lines are seeking rate increases in their 2008-2009 contracts of $400 per 40-foot container to the West Coast, and $600 per FEU for intermodal and East Coast all-water shipments, along with a $400 per FEU peak season surcharge in effect from June 1 through Oct. 31.
   TSA members are APL, "K" Line, China Shipping Container Lines, CMA CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, Mediterranean Shipping Co., Mitsui O.S.K. Lines, NYK Line, OOCL, Yang Ming and Zim.