Issue link: http://digital.nexsitepublishing.com/i/643635
www.cargobusinessnews.com January 2016 5 neWs, trends & analysIs partnership through 2020 that will see Kuehne + Nagel run the core business of transporting products from the raw materials supplier to trade customers for the leading global healthcare company. Kuehne + Nagel said it would provide skills and strategic capability to improve GSK's global supply chain operations. GSK's supply chain features numer- ous suppliers, a large number of manu- facturing units and a variety of specific routes to patients and consumers in over one hundred countries. Kuehne + Nagel was selected in part due to their existing relationship with GSK, and their exper- tise in pharmaceuticals and consumer product logistics. "Our focus is to leverage existing experience and industry-specific solu - tions serving the pharmaceutical and consumer sector which will deliver incremental benefits to GSK," said De- tlef Trefzger, CEO of Kuehne + Nagel International. "Our integrated logistics approach, comprising air, sea, overland services and logistics control centers in four regional hubs will enable GSK's global supply chains to move to the next level of performance." U.S. CoAST gUARd MovES foRWARd To ACqUiRE TWo NEW iCEbREAkERS The U.S. Coast Guard announced a pro- posed acquisition timeline and require- ments for two new heavy U.S. icebreakers that will cost up to $1 billion each, saying it would meet with interested companies during an industry day in March. Coast Guard Commandant Admiral Paul Zukunft told an event hosted by the Center for Strategic and International Studies that notice was intended to get information from companies about their ability to build and develop icebreakers that would be in use for 40 years and to explore options such as leasing. Key requirements for the new ships include the ability to break through ice with a thickness of at least 6 feet at a continuous speed of three knots, and the ability to break a single-pass channel through ice to a width of at least 83 feet. The agency said the ships would also have to operate for at least 80 days without replenishment of food or fuel, and have a minimum range of 21,500 nautical miles at 12 kts in ice-free waters. The Coast Guard said it had not final - ized an acquisition strategy, but hoped to release a draft request for proposals in the first quarter of fiscal 2017, award- ing a contract in the last quarter of fiscal 2018 or fiscal 2019. Huntington Ingalls Industries, which built the newest U.S. icebreaker and de - livered it in 1999, said it was "absolutely interested" in building icebreakers for the U.S. Coast Guard. General Dynamics Corp, the other large U.S. military shipbuilder, has also expressed interest in the program, as have other shipyards, the Coast Guard said. President Barack Obama in September called for the U.S. to accelerate plans to buy at least one new heavy icebreaker for the U.S. Arctic by 2020, instead of the previous goal of 2022. Each ship is likely to cost around $1 billion. Melting sea ice in the region has in - creased traffic and could open the Arctic to more shipping, mining and oil drill- ing, increasing the potential for ships to be stuck in ice that still covers the region for much of the year. F o r m o r e o f t h e R e u t e r s s t o r y : www.reuters.com bNSf To SlASh SPENdiNg $1.5 billioN oN fREighT SlUMP BNSF Railway intends to reduce capital expenditures for the first time in six years as railroads seek to lower costs amid a freight slump. The rail company said that it will spend $4.3 billion, down 26 percent from a record $5.8 billion in 2015, on locomotives, rail cars, track and mainte- nance. BNSF had increased investment since 2010, which marked a six-year low of $2.7 billion. The railroad joins Union Pacific., CSX Corp. and Kansas City Southern in lowering spending amid a drop in carloads, led by weakened coal demand. Total traffic for large U.S. railroads fell 2.5 percent last year and the declines have continued into the first two weeks of 2016, according to the Association of American Railroads. BNSF, the largest North American rail- road by carloads, came under fire from customers and regulators in 2014 after surging crude-oil cargo, a record grain harvest and harsh winter conditions caused service to decline. In reaction, the railroad pumped up spending by almost 50 percent to $11.3 billion in 2014 through 2015 from the previous two years. The investment has paid off. BNSF's train speeds have recovered and the railroad has added new express routes. BNSF's total traffic fell 0.1 percent last year, compared with a 5.9 percent de - cline for Union Pacific and 4.9 percent for Kansas City Southern's U.S. opera- tions, according to AAR data. AlPhAliNER: CoNTAiNER ShiP CAPACiTy To iNCREASE by SloWEST RATE iN 25 yEARS Alphaliner has forecast that worldwide container ship capacity will increase by 4.6 percent in 2016, the slowest growth rate in more than 25 years, giving some re- lief to an industry battered by oversupply. Freight rates have dropped sharply, driving many shipping companies into losses, as global trade has failed to keep pace with the number of new vessels entering the market. "Falling below the previously smallest year-on-year increase of 5.5 percent, recorded in 2009, it will register well