APL Logistics, Con-Way Freight Launch China-U.S. LCL Service

Less-than-container load service combines premium ocean carriage with LTL transportation for port-to-door delivery

Less-than-container load service combines premium ocean carriage with LTL transportation for port-to-door delivery

San Mateo, CA — August 17, 2006 — APL Logistics and Con-way Freight are partnering to launch a new service providing delivery of less-than-container load (LCL) shipments from China to the United States, the two logistics providers have announced.

The new service, dubbed "OceanGuaranteed," was developed in response to increasing customer demand for a premium ocean LCL/domestic less-than-truckload (LTL) service that offers faster transit times and day-definite delivery that is more cost-effective than air freight, the companies said.

The program will provide "port-to-door" guaranteed service from Hong Kong, Shanghai and Shenzhen in China, to all continental U.S. destinations served by Con-way Freight, with Los Angeles serving as the U.S. port-of-call for customs clearance and deconsolidation.

Shipments that fail to meet the delivery-day commitment receive a 20 percent discount, subject to the terms of the service guarantee, according to APL Logistics and Con-way Freight. The companies are accepting bookings for the new service effective September 5

Competing with Airfreight

"We have created an entirely new service category for our customers that responds to their demands for a premium, day-definite ocean service with transit times and delivery reliability that far exceeds traditional LCL products," said Brian Lutt, president of APL Logistics, in a statement announcing the new service. Lutt said that the service should provide a more economical alternative to international airfreight.

"In today's global marketplace, the majority of our customers are sourcing some aspect of their business in China," said David McClimon, president of Con-way Freight, which operates the most extensive regional LTL freight transportation network in the United States. "They are managing longer supply chains and more import volumes, yet they still remain under pressure to accelerate product through their domestic distribution networks as rapidly and cost efficiently as possible. Combining our network with APL Logistics creates a new service that directly addresses this critical requirement."

For C-TPAT certified customers, shipments tendered under OceanGuaranteed will be segregated in dedicated C-TPAT-only containers, minimizing the chance of potential delay from non C-TPAT shippers and allowing these cargoes to be "green laned" by U.S. Customs and Border Protection.

"Simplified" Pricing Structure

Moreover, APL Logistics and Con-way Freight said they have established a simplified pricing structure for OceanGuaranteed. Shipment pricing will be calculated on a per kilo rate, based on delivery from the origin ports in China to 11 delivery zones in the United States. OceanGuaranteed shipments also will receive expedited handling, including late-gate privileges at origin, "last on, first off" loading/unloading and priority shipboard stowage for rapid discharge at the destination port.

APL Logistics serves as the overall program manager and the carrier of record for shipments tendered on APL Logistics through bills of lading. Operationally, APL Logistics will handle all in-country China shipment management services. Ocean carriage will be provided by APL Logistics' sister company, APL. Con-way will manage receipt of ocean containers and deconsolidation in Los Angeles, as well as delivery of cargo as LTL shipments to the customer's door in the U.S.

The two companies said they decided to establish the joint service following the results of a market study commissioned with MergeGlobal, an industry research and consulting service. The study examined current and emerging conditions for transportation service and capacity in the trans-Pacific, as well as shipping patterns, outsourcing practices, business economics and customer supply chain issues.

The study revealed an opportunity for a premium service such as OceanGuaranteed that offered faster transit coupled with higher consistency and reliability, the two companies said.

Additional Articles of Interest

— America's aging transportation infrastructure can't keep up with relentless world trade growth, and if it isn't overhauled, consumers and the U.S. economy will pay a steep price, warns APL President John Bowe. Read more in this SDCExec.com story.

— To learn about best practices for optimizing last mile pick up and delivery operations, read "The Last Mile is the Longest Mile," in the June/July 2006 issue of Supply & Demand Chain Executive.