♦ Chairman’s corner
♦ Port Security Bill Passes in the Senate
♦ Delta Airlines expands international service routes
♦ Etihad Airways keeps pace with promises
♦ DP World first to meet international security management standard
♦ Cement plant from Arizona to Bolivia
♦ Hanjin sells stake in US terminals
♦ Prototype SENSO car from Europe to Pittsburgh, PA
♦ Airfreight tripling by 2026, says Boeing in forecast
♦ A need for Regulatory Defense
♦ A happy wedding party
♦ Anniversaries
♦ “Hot off the Press”
♦ Winner of the month

Reflecting on the events of a year gone by, always leads to contemplating the future. The thoughts about things we have achieved inevitably bring our thoughts to matters that still need to be done, thus reminding us, that all achievements breed new challenges. Complacency is the mother of doom. The only constant in life is change.

This year has been an important one with internal changes for us as well as a lot of external pressures related to security programs, compliance and general market conditions. Nothing has slowed our forward development and 2006 thankfully has again been a successful year for EMO-TRANS worldwide.

Our growth in number of shipments, weight and results has exceeded our earlier expectations and has created opportunities for new offices and markets. We now have Route Development positions in place for China, Eastern, Northern and Western Europe, Middle East, South Africa and South America. Appointments for India and South East Asia will follow in 2007. We are working to intensify our role in Korea and Japan.

The Global EMO Group as a whole will strengthen it’s ties through a new mutual development program. This will include additional investments in such important areas as IT programs, Global partnerships, expansion of transportation insurance coverage, coordinated sales development, employee exchange programs between countries for personnel training purposes and many more.

I am excited about the opportunities created for us and for the growth of our organization.

All this can only be achieved with the hard work and diligence of our loyal employees along with the strong support of our customers, network partners and vendors. I thank you all for your commitment to EMO Trans.

I wish everyone a Merry Christmas, Happy Holidays and a Healthy and successful New Year.

All the Best
Jo Frigger
Chairman & CEO

By a vote of 98-0, the Senate passed its comprehensive port security legislation. The only really controversial provisions were those that would have mandated 100% scanning, which importers and exporters strongly opposed, as did the ports and steamship lines, as they would clog the ports, delay the flow of containers, and divert limited Customs personnel, without improving security.

All 100% scanning amendments that were offered were defeated. The only exception was a scanning amendment that requires:

1) That all cargo be "screened" to identify high risk containers (this is already being done under the 24 hour advance manifest rule), and

2) that all high risk containers be "scanned", but only after the Secretary of DHS determines several important operational and economic criteria have been met.

This amendment passed by a vote of 95-3, demonstrating the influence of the election year when every Senator wants to be able to show that they voted for some cargo security legislation

Screening refers to using intelligence and a container's paperwork to determine if it poses a threat. Scanning refers to running a container through an inspection device, in particular a radiation portal monitor.

The Senate and House would like to complete conference negotiations and send the bill to the President to sign into law by the end of September, when both chambers are expected to adjourn until after the elections.

Note… The first airfreight scanning phase at the airport of San Francisco has been very successful and only a few delays were encountered. Next airport on the US West Coast to scan all airfreight will be Seattle SEA-TAC.

Delta will expand its international network in 2007. The company intends to add flights “to high demand destinations across Asia, the Middle East, Europe and Latin America”. New and expanded services out of its hub in Atlanta will be offered to Prague, Vienna, Dubai, Seoul-Incheon and Sao Paulo.

These services will be effective beginning in May and June 2007. Additionally, Delta will also enhance services from New York JFK to London Gatwick, to Pisa/Florence, Shannon/Ireland and Bucharest/Romania. These services will be available as of Spring 2007.

Abu Dhabi based Etihad Airways said “current dynamic economic development in the Middle East offers enormous opportunities for the airline industry”. The carrier just celebrated the first anniversary of its Toronto service via Brussels, while at the same time Etihad is spreading its wings further afield as it launches daily non-stop A340-500 flights from Abu Dhabi to New York.

It's ironic. The very ports operator that US politicians considered to be such a threat to US security turns out to be the first global marine terminal operator in the world to comply with the ISO/PAS 28000:2005 international security management standard.

DP World's security management systems and operations at its head office in Dubai and Djibouti Container Terminal have been certified compliant with the ISO/PAS 28000:2005 international standard. The standard is to be rolled out to DP World's global network of terminals

The ISO/PAS 28000:2005 international system underpins all of DP World's internal and external security initiatives and activities, and will be phased in across the whole DP World network of terminals following its successful implementation in Dubai and Djibouti.

As a consequence of DP World's adoption and implementation of the standard, its network of ports will have the ability to effectively implement mechanisms and processes to address any security vulnerabilities at strategic and operational levels, as well as establish preventive action plans.

All terminals will also be required to continually assess security measurements in place to both protect its business interests and ensure compliance with international regulatory requirements such as the ISPS Code and other international supply chain security initiatives. The standard will complement all international security legislative codes to which DP World's terminals already conform.

"We are delighted to have achieved this certification," said DP World chairman Sultan Ahmed Bid Sulayem. "This is the very first time that any global company in our industry has met such a rigorous international standard, and is testament to DP World's commitment to the highest security management practices. It is impossible to overstate the importance security plays in our business, to our customers and to DP World."

Due to the debacle in the US over the DP World-P&O Ports deal, this now means that the US ports that were excluded from the deal will not be part of DP World's global rollout of this security standard.

Dubai’s DP World intends to boost global container capacity by 50%. They also plan to increase annual global container-handling capacity at its terminals to 70 million TEU’s from the present 46.5 million TEU’s.

Mohammad Al Muallem, senior vice president and managing director of the world's third-largest terminal operator, in an interview with Gulf News said that the increase will take place "within a few years."

The ports arm of the Dubai government is currently involved in nine new terminal projects worldwide which will add a total of 24 million TEUs capacity when fully completed, and an additional 13 million TEUs by 2010.
Those plans include a $1.5-billion expansion at Dubai's Port of Jebel Ali that will add 5 million TEUs by the end of 2007.

"We are still looking for new areas where we can have terminals," Al Muallem told the newspaper.

Dubai acquired the port assets of Britain's P&O for $6.8 billion in February. The combined company operates 52 terminals in 30 countries with annual throughput of 36 million TEUs and capacity of 46.5 million TEUs.

Dubai is in the final stages of selling off P&O's U.S. assets after members of Congress threatened to block the sale claiming the Arab company threatened national security.

How do you move a cement plant from Arizona to Bolivia? You call EMO Trans and we will find a way!

Our Los Angeles and Phoenix offices together with our partners Masterline Logistics in Bolivia, are moving a complete cement plant to Bolivia. This is not your daily kind of shipment, but our staff is well equipped to handle such projects. Please take a look at some of the pictures!

The bull market for global port properties took another step forward as Hanjin Shipping announced it is selling a 40-percent stake in its terminal operations in Long Beach, Oakland and Seattle to a Korean subsidiary of the Australian investment bank Macquarie for 844 billion won (US$348 million).
The transaction, which also includes Hanjin's container terminals in Kaohsiung, Taiwan and Osaka and Tokyo, Japan, will create a stand-alone operating company. Hanjin will continue to own and run five other dedicated container terminals that are not part of this transaction.

Under the terms of the transaction, the Macquarie Korea Opportunities Fund will make a 40-percent strategic investment in Hanjin Terminals while Hanjin Shipping will spend US$252.1 million for its 60-percent ownership, according to Australian media reports quoting Hanjin stock market filings. The transaction values Hanjin Terminals at approximately $870 million.

Hanjin Shipping will retain management control over Hanjin Terminals, in addition to coordinating certain material decisions with Macquarie.

Hanjin said the transaction will not affect on-site management or operations of the respective facilities, and that in Japan, the scope of the transaction is limited to the administration of terminal facilities. It also said all of its senior management at the terminal company will remain in place.

Hanjin Shipping President, Jung-Won Park, said the move would enable the company to increase its market share of marine facilities operations while complementing its global expertise in the shipping and port facility management sectors.

Macquarie, which has invested in a wide array of infrastructure, is reportedly a finalist in the bidding for DP World's U.S. port assets.
The Australian investor earlier lost out on a bid to buy Associated British Ports, the United Kingdom's largest terminal operator, which was acquired for more than $4 billion by Goldman Sachs of the U.S.

This futuristic looking prototype car was moved through Emo and Swiss International Airlines via airfreight to New York. There it cleared customs and was sent on to Pittsburgh, PA for an exposition. After completion of the show it was re-exported back to Europe.

Start saving if you are interested in buying this car one day. The declared value was $500,000.00 (as in half a million Dollars, that is).

SEATTLE -- The Boeing Co. said that global air-cargo traffic will more than triple over the next 20 years, driving a doubling of the world freighter fleet to 3,563 aircraft.

Boeing, in its annual World Air Cargo Forecast, expects airfreight to grow by an annual average of 6.1 percent during the next two decades, led by Asia markets. Domestic China markets will grow at by 10.8 percent a year during that span, and intra-Asia markets by 8.6 percent. China accounts for nearly a third of the trans-Pacific air-cargo market, with Japan a distant second at about 24 percent.

"Air cargo markets linked to Asia will continue to lead other markets through 2025," said Nicole Piasecki, vice president of strategy and marketing for the jet maker's commercial division, in a statement accompanying the forecast. "International air cargo traffic growth will be driven by increased international trade, increased liberalization of air services and the improving technologies that our industry continues to incorporate: increases in lower-hold capacity and more fuel-efficient freighters."

Traffic moving between Asia and North America is expected to grow by 7.1 percent a year; Europe-Asia will average 6.9 percent, Boeing said.
More mature markets, such as North America and intra-Europe, will grow more slowly than the world average, as will routes involving Latin America and the Middle East. Europe-Southwest Asia will experience slightly higher than average growth of 6.2 percent.

"Although 2005 traffic growth was a bit subdued due to fuel prices, the long-term outlook is for historical trends to prevail," said Tom Crabtree, regional director of marketing for Boeing's commercial unit, and one of the forecast's primary authors. "Spot jet fuel prices increased 42 percent in 2005 and have continued to increase in 2006, but in spite of these increases traffic is continuing to grow, experiencing a 3.1-percent increase for the first six months of 2006, compared with 2005."

While the report noted that the world freighter fleet has remained fairly stable over the past five years, deliveries of widebody freighter are accelerating as carriers replace aging standard-body aircraft and first-generation widebodies. Widebody freighters now number 900, up from fewer than 250 in 1994.

Boeing predicted the freighter fleet's greatest growth will continue to occur in the widebody segment and ultimately represent 64 percent of the fleet compared to 50 percent today. Widebodies also will eventually comprise more than 90 percent of total freighter capacity.

Of the 2,983 freighters predicted to join the fleet over the next 20 years, 1,209 would be replacements for retired aircraft and 1,774 for growth, Boeing said. Also, more than 75 percent, or 2,217 aircraft will come from passenger jets converted to freighters, while 766 will be new production freighters.

Understanding the regulatory requirements and exercising due diligence in performing transactions with the U.S. Customs and Border Protection (CBP) is crucial to avoid customs fines and penalties for both brokers and importers. The cost of legal defense and fines can be costly. In a recent case of U.S. v. UPS Customhouse Brokerage, Inc. (UPS/CHB), the U.S. Court of International Trade (CIT) held CBP can issue and collect monetary penalties in excess of $30,000 under the broker statute 19 U.S.C. § 1641 for failure to exercise responsible supervision and control regarding transactions with CBP.

UPS/CHB failed to correct 45 entries submitted to Customs despite Notices of Action, warning letters and CBP training. As a result, Customs assessed five penalties against UPS/CHB totaling $75,000. When the fines were not paid the Government filed with the CIT an action to recover the amount. At issue was the meaning of a phrase in the broker statute 19 U.S.C. § 1641 reading “a monetary penalty not to exceed $30,000 in total for violations of the broker statute.” UPS/CHB alleged that the statute bars the government from collecting more than a single penalty, not to exceed $30,000, for all violations under Section 19 U.S.C. § 1641 preceding the issuance of the pre-penalty notice.

The court noted that the statue was purposely vague on the scope of the broker penalty and Custom’s interpretation should be given “Chevron deference.” This means since Customs construed and applied its statuary grant of authority in a reasonable manner, a great amount of deference is owed to an agency’s interpretation of its own regulations. The CIT held its decision to allow the separate broker penalties that totaled more than $30,000, even though the underlying violation was the same for the various entries involved. It’s possible that this case may be appealed – which means additional legal fees for the broker.

A happy wedding party

Sven Frigger, son of our EMO USA Chairman, wed his beautiful bride Samantha a few weeks ago. It was a beautiful wedding on a spectacular sunny autumn afternoon on the shores of Long Island, NY. Sven works in our IT department in headquarters. We wish both of them a happy, wonderful and long life together.

5 years:
Eric Poujol, formerly Emo Trans Houston, now the Route Development Manager South Africa, stationed in Johannesburg
Larry Kaye, Boston

10 years:
Stacie Countryman, Atlanta
Donna Yeager, Pittsburgh, PA
Keith Palmer, ATL

15 years:
Susan Budd, Hartford, CT
Cynthia Wood, ATL

Thank you very much to all of you for your continued hard work and CONGRATULATIONS!!!

May I introduce Colin Mills, son of Laura Mills, born just a few days ago. I think he looks just like a future freight forwarder, don’t you think? Congratulations to Laura from all of us.

The winner of the “fuel gift certificate” is Vivian Guo. Way to go Vivian !
Next time to start the New Year off right, we will be giving away a nice bottle of Champagne!

Everyone here at EMO Trans wishes you a wonderful holiday season. To our clients we would like to thank them from the bottom of our hearts for their continuing support this past year. To our overseas coworkers and partners a big Thank you for their help this year. And as we continue to work together these last days of the year 2006, let us also reflect on the not so fortunate. Instead of sending out Christmas cards, we will donate the money to a worthy cause.

Happy Holidays.

If you enjoy reading this newsletter and have a friend or a coworker who you believe might benefit from it, please forward it on. We encourage your ideas and suggestions. EMO Trans respects your privacy. We do not share your information with anybody and will only use this data to send you information via this newsletter. Thank you for taking the time to read our newsletter.

Gisela M. Beckermann
Director of Sales
Northern & Eastern Europe
Tel: (650) 303-5115
www.emotrans.com

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