Friday, September 19, 2008

This is the way of the future



There are so many inefficiencies that we live with everyday. For the most part, people do not notice until some outside event forces them to re-evaluate the way they do business.
In the future, everything will work.












Wednesday, September 17, 2008

Highway Trust Fund Made Official

From Logistics Management:

WASHINGTON-Days after Federal highway funding received a much-needed boost, when the US House of Representatives last week voted by a 376-29 margin to sign off on H.R. 6532, the Highway Trust fund Restoration Act, the bill was officially signed into law by President George W. Bush.

This bill calls for a transfer of more than $8 billion from the United States Treasury General Fund to the Highway Trust Fund.

This vote paves the way for a transfer of more than $8 billion from the United States Treasury General Fund to the Highway Trust Fund. The legislation will now be sent to President Bush to be signed.

This news comes at a time when the future of the Highway Trust Fund was dire, as it was facing the prospect of running out of money entirely. At the end of July, the US House of Representatives approved H.R. 6532 to restore more than $8 billion to the Highway Trust Fund balance, which the White House said was soon to be facing a deficit of more than $4.3 billion. And earlier this week the US Senate approved the transfer of funds, too.

Last week, Department of Transportation Secretary Mary E. Peters called out Congress for the Highway Trust Fund’s financial situation, saying that President Bush has warned Congress of the pending shortfall and submitted budgets with fiscally prudent steps to close the gap. And she has called on Congress to go forward with passing “a fiscally responsible and effective transportation spending bill for the coming fiscal year—one that is free of waste and free of earmarks…and promotes solutions to our most pressing transportation challenges instead of ignoring them.

She added that that the situation has been exacerbated due to the oil and gas price spikes that have occurred this year and have resulted in vehicle miles traveled dropping by more than 50 billion miles in the last eight months. This is especially relevant, considering that the Highway Trust Fund is largely financed by the motor fuel federal tax, which is 18.4 cents per gallon for gasoline and 24.4 cents for diesel, and it has not been raised since 1993.

In 1993 a gallon of gas cost $1.04, so a 18.4 cent tax was equivalent to a 17.7% tax. If this tax would have been a percentage of a gallon instead of a flat rate, it would be 68 cents at today's prices.

Considering this, it is not hard to see how and why our nations highways and infrastructure is seriously under-funded.

Friday, September 12, 2008

Port of Houston To Close In Preparation Of Ike

Dear shippers: You don't have to worry about hurricanes on the West Coast. I am just saying.

Story from Chicago Tribune

Just to clarify: Houston is the nation's second largest port when in comes to freight tonnage. The first is South Louisiana (New Orleans). This is because of grain shipments in middle American to the rest of the world. For Houston a lot of that tonnage is oil.

Thursday, September 11, 2008

JH Real Estate Snags Inland Empire Retail for $65M

Palm Grove Shopping Center Sold to JH Real Estate for $254.90psf

Newport Beach, CA-based JH Real Estate Partners recently acquired a 255,000-square-foot shopping center in Redlands, CA from Land House Development Co., also of Redlands. Located at the convergence of Lugonia Ave and Alabama St in Redlands, the center sold for $65 million, or approximately $254.90 per square foot. The transaction was financed by a $45 million loan from Wachovia Bank.

Located on 20 acres, the center is 100% leased to tenants including J.C. Penney, a combo Toys 'R Us/Babies 'R Us store, Men's Wearhouse, Chili's restaurant, and more. The project is located directly across from the entrance to Citrus Plaza, which is anchored by Target. House Land has office and hotel space in the works behind Palm Grove.

Typically a multifamily investor, JH has acquired two other retail centers since deciding to branch out into retail investment in 2007. In April 2008, It acquired Porter Ranch Shopping Center, a 55,418-square-foot neighborhood center anchored by Whole Foods Market in Porter Ranch, CA, for $26.15 million, or $471.87 per square foot. And in April 2007, it acquired Brea Imperial Center, a 44,883-square-foot strip center located in Brea, CA with no significant anchor tenant, for $18.5 million, or $412.18 per square foot.

Monday, September 8, 2008

Dallas Fed Chairman Speaks On State Of The Economy

My Favorite Fed Official: Richard Fisher of the Dallas Fed. Here is his September speech on the state of the economy.


Mag-Light: Made In Ontario

Little did I know they occupy a 700,000 SF manufacturing facility (located at 2001 S. Hellman) right here in the Inland Empire.

Friday, September 5, 2008

Zocalo - L.A. vs. Seattle: Whose Pacific Rim is it?

I was going to wait for the actual Pod-cast to be available, but who knows when that will be. Here is a written summary.

Me and Michael Soto were in attendance to this event, which seeks to discuss developments at the ports of La / Long Beach in contrast with the ports of Seattle. There were a couple of speakers at this event.

Steven Erie (moderator): Professor of Political Science and Director of Urban Studies & Planning at University of California, San Diego

Thomas J. O'Brien (Representing LA/LB): Director of Research, Center For International Trade & Transportation, California State University, Long Beach

David Olson (Representing Seattle): Professor of Labor Studies at Washington University, an honest to god Knight of Norway.

Conclusion: After about 30 seconds, David Olson conceded. LA/Long Beach OWNS the pacific rim trade. At least for now.

The point wasn't really to showcase the competition between the two ports, but rather to highlight the challenges both ports are facing.

Obvious challenges: Environment, Labor, Congestion, Politics

It was interesting to learn the politics behind the location of the LA/ Long Beach port (collectively referred to as the San Pedro ports in academic circles).

The whole region was more or less owned by the railroad, and they wanted to put the port for the region in Santa Monica. When the Southern Pacific Railroad arrived at Los Angeles a controversy erupted over where to locate the sea port. The SP preferred Santa Monica, while others advocated for San Pedro Bay. The Long Wharf was built in 1893 at the north end of Santa Monica to accommodate large ships and was dubbed Port Los Angeles. At the time it was constructed it was the longest pier in the world at 4700 feet, and accommodated a train. The plan did not last: San Pedro Bay, now known as the Port of Los Angeles, was selected by the United States Congress in 1897.

The port is actually a public agency and the state has huge influence what can go on at the ports and port revenues stay in the port. Thus, the San Pedro Bay had better lobbyists so the were able to secure the largest economic engine of the state. Santa Monica received the consolation prize, an amusement park on a pier.

The port commissioners, one for Los Angeles and one for Long Beach, are appointed by the mayors of their respective cities. These cities place a different level of importance on the port. For Los Angeles which is connected to the port via a narrow umbilical cord whereas for Long Beach, the port is at the center of life for the city. Thus, the recent clean-port policies reflects the importance of the port for these cities and helps to explain their behavior.

For Seattle, the port is small beans. Only 1.7 million TEU's, or about what LA/ Long Beach pushes out over a 2-3 week period. The reason why so little stuff comes through Seattle is that there are many smaller ports in the region that compete directly with Seattle, and Seattle doesn't have captive cargo like LA/ LB. Captive cargo means that the cargo has to go there, as it is the final point of consumption for the cargo, cargo orginates or is destined for LA/ LB. Seattle doesn't have the population to be a major contender.



Thursday, September 4, 2008

Solar Ships? What A Bright Idea

From Wired:

Toyota's Solar Car Carrier

Two Japanese firms are building a solar power system to augment the diesel engines aboard a cargo ship that carries new Toyotas to the United States, a fuel-saving move that makes solar panels on a Prius look like a drop in the bucket.

Slapping photovoltaic cells on a 60,000-ton boat will cut fuel consumption by 6.5 percent, which seems paltry until you realize the average cargo ship burns 120 gallons per mile. The system Nippon Yusen KK is paying Nippon Oil Corp. $1.4 million to develop will save about 46,800 gallons of fuel carrying all those cars 6,000 miles from Japan to Califonia.

To put that in perspective, if you bought a Toyota that arrived on a solar ship with 4,999 other cars, it would have saved nine gallons of fuel before you ever even saw it.

But solar ships do more than save fuel. They also clear the air. Cargo ships burn "bunker fuel," the truly nasty stuff that literally comes from the bottom of the barrel. It's kind of like the Milwaukee's Best of fossil fuels.

A study published in Environmental Science and Technology found emissions from the bunker fuel cargo ships burn may cause 60,000 deaths worldwide. Subsequent research found ship exhaust contributed as much as 44 percent of the sulphate found in fine particulate matter in the atmosphere of coastal California. Anything that cuts the amount of bunker fuel ships burn is nothing to sneeze at.

Nippon Yusen, Japan's largest shipping line, says the solar assist will cut CO2 emissions by 1 to 2 percent per year, or about 20 tons, according to Reuters. Although solar panels have been used at sea to generate power for crews quarters, this is the first time anyone's tried to use them to help propel cargo ships. Beyond seagull-proofing the system, the engineers must figure out how to make it tough enough to withstand salt and vibration. Ikutoshi Matsumura, executive vice president of Nippon Oil, says the first solar ship will be ready to sail by December with "full commercialization of the system in three to five years."

Nippon Yusen could be ahead of the curve, as there is a worldwide push to ban bunker fuel (aka Chanel No. 6) in coastal waters. California, naturally, is among the first, banning its use within 24 miles of shore beginning in July. Similar rules will be in effect worldwide by 2015. Such bans could make shipping cargo more expensive because bunker fuel, as disgusting as it is, is cheap and does the job. Kind of like Milwaukee's Best.

The solar boat isn't the first attempt at cleaning up cargo ships. A much earlier system developed by the Sumerians used wind. More recently, Germany's SkySails has developed a modern interpretation of the sailboat that uses sails the size of football fields to cut fuel use by up to 35 percent. A 2006 design study by Scandanavian shipbuilder Wallenius found ships could use wind and solar power along with fuel cells to create zero-emission shipping.

New technology is another way shipping companies can reduce the cost of transporting cargo in the face of rising fuel prices and stricter emissions standards, all while shortening the "long tailpipe" and giving car buyers something to feel good about. Still, just like the old "double-nickel" speed limit, the less advanced ships can save some fuel by simply slowing down: Dropping speeds by two knots can increase fuel efficiency by up to 5 percent.