Alliance Formed to Offer Weekly Hong Kong-Los Angeles Service

Also: 3PL LOGISCO makes strategic move on Los Angeles

Also: 3PL LOGISCO makes strategic move on Los Angeles

Los Angeles  February 17, 2005  Great Western Steamship Company (GWSC), U.S. Lines Limited (USL) and Maruba Line have concluded a vessel sharing agreement (VSA) and will jointly operate a weekly, fixed-day service between Shekou/Hong Kong and the L.A./Long Beach gateway.

Also this week, third-party logistics (3PL) provider LOGISCO has expanded its national operations with a strategic move into the Los Angeles market as the warehousing and distribution firm continues its rapid growth plan.

The VSA concluded by Great Western, U.S. Lines and Maruba will be known as the Americas Alliance. Initially the service will operate with five 2,100 twenty-foot-equivalent unit (TEU) vessels, with each line contributing tonnage to the VSA. The service will commence on February 27 with the sailing of the Oder Trader from Shekou.

Upon launch of the new VSA, GWSC, USL and Maruba are in discussion to introduce new services in markets that they presently do not serve in order to meet the shipping requirements of their respective customers. This will be accomplished through the deployment of additional tonnage and strategic cooperation with other carriers, the three lines said.

Second Transpacific String Planned

"The alliance will enable each of the companies to continue to offer their customers a superior service while also allowing for the optimization of costs," the partners said in announcing the agreement. "The VSA partners will be well-positioned to capitalize upon the economies of scale provided through larger class tonnage as the Americas Alliance looks to grow and strategically position itself for continued service expansion in the future."

Specific plans for a second transpacific string commencing in the second quarter of 2006 are already under discussion, according to the companies. The service would provide a weekly, fixed-day service from South and North China ports to both the L.A./Long Beach gateway and Pacific Northwest ports.

In addition, the parties are discussing the implementation of a service to commence in the second or third quarter of 2006 from South and North China ports to the U.S. East and Gulf coasts, which would include service to the west coast of South America.

LOGISCO Opens L.A. Operation

Meanwhile, LOGISCO, a contract and pubic warehousing company, said that it had signed a multi-year lease for a 100,000 square foot industrial property in the L.A. suburb of Compton. The move was made, in part, to satisfy a specific client need.

"Our initial Southern California operation will support a portion of a national chemical warehouse logistics contract," said Chuck Cline, president of LOGISCO. "But this foothold in the Southern California market will provide us with the ability to quickly expand our operations here to serve other clients."

LOGISCO, which said it has experienced rapid growth since its creation in 2000, operates approximately 5.2 million square feet of dedicated contract and public warehousing space throughout the country.

Future Expansion Plans

The Compton distribution facility will be fully operational in the first quarter, according to Mike Jones, LOGISCO's vice president of development. "Once we are out of the 'start-up' stage and comfortably meeting our operational goals, we will start to open the service to the rest of our customer base." Jones said.

The company's customers include some of the largest food and beverage, chemical and direct-to-consumer fulfillment firms.

LOGISCO said that future expansion in Southern California would allow the company to better reach the four corners of the country. Current LOGISCO West Coast warehousing and distribution operations are managed out of LOGISCO's Arizona warehouse, in addition to its presence in the South and Midwest.

A Central Location

Brad Vickery, executive vice president and principal of the commercial real estate firm GVA DAUM, which helped broker the multi-year lease between LOGISCO and the building's owner, RREEF, said the Compton facility is in a major growth area for logistics firms.

"From a logistics standpoint, you can easily get anywhere in the L.A. basin from that facility," said Vickery. "It's centrally located to the 405, 91 and the 110, as well as the ports."

LOGISCO took over the space, located at 350 and 390 W. Manville Street in Compton, in December and has begun limited operations during the ramp-up phase.

For more information on the latest trends in the logistics space, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.

For more information on the global supply chain, with a focus on security issues, see "Building the Secure Supply Chain," the Net Best Thing article in the June/July 2003 issue of iSource Business (now Supply & Demand Chain Executive) magazine.

For more information on the challenges and opportunities presented by increasingly global supply chains, see the special in-depth report in the August/September 2004 issue of Supply & Demand Chain Executive, which includes the following articles: