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Keller: Future Bright For Intermodal

February 20, 2009

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Despite the current global economic slump, the future of international, intermodal transportation will be strong and vibrant in this era of globalization,
said Peter Keller, member of the board of directors of the Intermodal Transportation Institute at the University of Denver and President of NYK Line (NA).

Keller made the remarks to a Denver audience of representatives from transportation, government, and academia while delivering the keynote address at the Denver Transportation Club's 28th annual transportation forum.

"We live in a world that is truly flat, as Thomas Friedman points out so well in his recent book," Keller said. "All we need do is look at how quickly this economic downturn came upon the entire world. The growth of international transportation during the 1990s and earlier has brought the continents closer together and made us increasingly interdependent.

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"Certainly we are all concerned about the current economic situation and the state of our international supply-chain community, which has seen consumer confidence wither and demand decline; but we cannot turn back the clock. Our world will continue to shrink, to flatten, and we will continue to be more interdependent. While we are in a difficult economy, we should not dismiss the distinctions between the short-, medium-, and long-term future of transportation in a global economy. International trade and transportation will flourish in the long term."

"From adversity and change come opportunity and we must be ready for the turnaround," he said. "Each business cycle increases the pace of change, so we must be prepared to accelerate our pace of improvement and accelerate our activity levels. An economic depression is the time to review our transportation processes, to remove old, marginally productive assets, and to consider how we can add additional value to the international supply chain by reducing costs and increasing efficiencies. We need to re-evaluate our service models and patterns for the future.

"Yes, the near-term economic and transportation bubbles have burst, but after the downturn, we all know there will be an upturn. We need to plan for that eventuality now. We need to continue to seek global partnerships and opportunities. In this small world, which is getting smaller everyday, many people are still concerned or scared about the global marketplace. Don't be, it is the future."

Keller pointed out that the U.S. cannot afford to become isolationists in a time of economic downturn; but rather must work cooperatively to meet the challenges of change and develop strong global leadership to meet future needs. He reminded his audience that international transportation is a "team sport" with many players and it must be treated as such if it is going to work.

Keller also pointed out that the U.S. intermodal system has become the transportation model for the world and that the container industry he represents is a bit of an economic window into the global economy as it acts as the retail sector of global intermodal transportation. "Containers move the products that we all touch throughout the international supply chain -- the goods that sit on shelves at Wal-Mart and Target; the auto parts that are needed to infuse our auto industry; the economic fuels we need when the currently eroded consumer confidence and demand return." He also pointed out there will be challenges to be met:

· Fuel prices will rise again. We must plan now rather than simply "hope" for depressed rates to continue.
· We all know the American transportation infrastructure has endemic issues that will not dissipate anytime soon. We need to continue the push for an extensive, efficient National Freight Transportation Policy.
· We need to consider the impact that the Panama Canal expansion, scheduled for 2014, will have on global trade and plan accordingly to meet the shipping demands it will create as economic normalcy returns.
· We need to consider, how with economic upheaval, our population might relocate as industries evolve, consumer demand returns, employment returns, and freight begins to flow again.
· We need to adapt to our global supply chains as they mature and evolve.

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