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

Sent:                                           Wednesday, April 30, 2008 7:06 AM

To:                                               David Hickmott

Cc:                                               David Hickmott; David Hickmott

Subject:                                     RE: Impact of Olympic Games in 2008

Attachments:                          Beijing Presentation1.ppt

 

Dear Valued Unique Customer,

Further to the below message from last week, I have attached a power point presentation that was provided to us from an industry source for additional reference.

 

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

 

Discover the "Unique" difference of logistics from Asia to USA trade! 

 

Best Regards

David Hickmott - Executive Vice President

ph#404-767-0500 (ext 306)

Mobile# 678-478-6604

Fax# 404-767-3319

 

cid:156480415@29042008-322A

 

From: David Hickmott
Sent: Friday, April 25, 2008 7:30 AM
To: David Hickmott
Cc: David Hickmott; David Hickmott
Subject: Impact of Olympic Games in 2008

 

Dear Valued Unique Customer,

We have received several inquiries from customers about factory shut down in China before/during/after the 2008 Olympics in Beijing.  We have some research by consulting with our offices in China in this regard.  Please note the following:

1)     We do NOT have any official confirmation that China Government has ordered shut down of factories within 200km (or even 500km).  What we have heard is that there is some information on what the Chinese governments' plans are concerning the Olympics and air pollution.

2)     Six provinces and municipalities -- Hebei, Inner Mongolia, Shandong, Shanxi, Tianjin and Beijing -- have already started shutting down polluting factories and curbing power-plant production in an ambitious attempt to cut down on air pollution. The Chinese government has been concentrating on factories such as: cement, paper, etc. and power-plants that produce high levels of sulfur-dioxide which is a toxic pollutant.

3)     The Chinese government has plans for some restriction of vehicles but as of now the government has not announced the schedule and details.  Analysts say Chinese officials are reluctant to release details about the closures and restrictions for fear of damping economic investment in northern China, particularly in places such as Tianjin.

4)     For air freight, some cargo flights will land in TSN (Tianjin Binhai International Airport) during the Olympic Games such as Great Wall Airline,Galaxy Airline, China Southern Airline and we expect there will be more cargo flights landing in TSN but again, as of now we don't have details.

The distances between Peking (Beijing) and:
Qingdao: 343 miles
Tianjin:   71 miles
Dalian: 276 miles

Clearly China is viewing this as chance to showcase the best they can offer to the world and are planning on taking (or have already taken) steps to alter the world perception.  Several key initiatives and effects caused by the Olympics will effect international transportation:

·         CONGESTION: While Beijing is not a port it is a large manufacturing area.  Beijing maintains a leader position in the manufacture of telecommunications equipment, metal smelting and processing, raw and manufactured chemicals, and petroleum product refining and manufacturing.  The natural port of load for exports from the area around Beijing is Tianjin (69 miles to the southeast), while there will definitely be congestion around Beijing there will also be congestion around Tianjin as Tianjin will be the host city for quite a few events of the Olympics.  Deliveries from Beijing to Tianjin will most definitely be delayed, since that market is almost exclusively FOB driven the delays don’t directly effect us but timely deliveries to the port will be a factor.
 
·         HIGHER FUEL STANDARDS: China introduced the “China IV” fuel standards to help reduce emissions, contrary to earlier initiatives, the implementation of China IV is being enforced rigorously by local officials.  Difficulties in getting China IV compliant fuel distributed to all stations is already leading to shortages but coupled with increased demand during the Olympics may lead to trucking and delivery delays to the ports..
 
·         BUSINESS SHUT DOWNS: To reduce pollution, the Chinese government has announced plans to close down Beijing area manufacturing facilities at least 2 weeks prior to, and for the 3 weeks of the Olympics.  There is also some speculation that weather conditions present at the time of the Olympics may cause the shut down earlier.  The total shutdown of at least 5 weeks will first cause exceptionally high demand prior to the Olympics (mid-June through late July) for space from Tianjin, not only will the demand be high but it is likely that Tianjin will overshoot their allocations which will cause a lack of space at other ports as well (Qingdao, Shanghai).  During the games the lack of manufacturing will , of course, lead to a glut in space…but because a good deal of the raw materials needed to manufacture finished goods are also made in the Beijing area there will be a lull in demand immediately after the games as well.

We would strongly suggest that you inform your customers that their vendors should book early and that customers should adjust their internal schedules accordingly to accommodate the potential for missed sailings.  As we hear additional information I will share it with all.

 

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