www.puertorico-herald.org By MARIALBA MARTINEZ February 27, 2003 Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Once considered the ‘Crossroads of the Caribbean,’ Puerto Rico has implemented modern transportation technology to become the ‘Crossroads of the Globe.’

Opportunities on the fast track: Wherever an airplane can fly or a ship can sail, Puerto Rico can do business

In the 1950s, when Operation Bootstrap was igniting Puerto Rico’s industrial development revolution, it often took 30 days for cargo to get to our "isolated" shores, another week or two to get it unloaded, and up to a week to get it to its final destination on the island.

Today, the fastest U.S. vessels can travel between Puerto Rico and the U.S. mainland in three days, and next-day airfreight services are available from nearly every city in the U.S. as well as from Madrid, Panama City, and other international centers. Technological advances have placed Puerto Rico at the center of a global transportation network.

In other words, wherever an airplane can fly or a ship can sail, Puerto Rico can do business. . .and can do it fast.

Statistics from the Puerto Rico Ports Authority indicate a total 20.4 billion pounds of air cargo and maritime cargo were moved during fiscal year 2002. Maritime carriers handled approximately 19.7 billion pounds, or 96% of the total, while airfreight companies took care of the remaining 731.4 million pounds, or 4%.

San Juan’s Port of Puerto Nuevo, the island’s principal maritime facility, is the fourth largest container port in North America and the busiest and largest commercial port in the Caribbean. Approximately 1.7 million TEUs (a TEU is a unit of measurement equivalent to one 20-foot container) passed through the Port of Puerto Nuevo in 2002, according to statistics gathered by CARIBBEAN BUSINESS.

During fiscal year 2002, the island’s four U.S.-flagged maritime carriers--Crowley Liner Services (Puerto Rico), CSX Lines, Sea Star Lines, and Trailer Bridge--handled approximately 724,500 TEUs, a 5.7% increase compared with 685,500 TEUs in 2001. This translates roughly into 19.6 billion tons of cargo sailing in and out of the island’s largest maritime facility.

Since cargo headed for foreign countries doesn’t have to transship through a U.S. port, international carriers are established on the island, many of them by local agents. International carriers may have handled an additional 975,500 TEUs, representing $5.36 billion in goods exported to foreign countries during fiscal year 2002, a 1.5% reduction from $5.44 billion the previous year, while the value of foreign imports increased 7.6% to $13.74 billion from $12.77 billion.

Foreign carriers in Puerto Rico include Denmark’s Maersk Sealand, Norway’s Hual SA, Taiwan’s Evergreen Marine Corp., the United Kingdom’s P&O Nedlloyd, and Singapore’s NOL/APL. Planning Board trade statistics for fiscal year 2002 indicate the top foreign countries to which Puerto Rico exported goods were the United Kingdom, the Netherlands, the Dominican Republic, Belgium, Japan, Germany, Italy, France, and Ireland. South Korea, Argentina, and India are also rapidly emerging export markets for the island.

Technology--such as electronic shipment tracking, gyroscopes, 9,000- to 20,000-horsepower engines, ships that travel at 20 knots, bowel and stern thrusters that provide savings in docking fees, state-of-the-art container units for all kinds of cargo, and gantry cranes to handle cargo on and off the ship--has slashed processing time onshore. New highways have made it possible to travel to any point on the island in less than three hours.

The island’s importers and exporters depend on this transportation network to move freight reliably and safely in the shortest time and in the most cost-effective way. How is it done and, more important, how can you do it? CARIBBEAN BUSINESS asked the experts.

"About 93% of our cargo is maritime and the rest travels via airfreight," said Jose Moran, purchasing manager of Aireko Construction Corp. "Modern technology provides certain advantages that weren’t available 20 years ago. We have fast communications and easy-to-read shipping information. However, real-time data sometimes isn’t available, which may mean delays when receiving shipping documents."

The freight industry was revolutionized in the 1970s with the arrival of the fax machine, which enabled nearly instantaneous communication between different points in the world. Edmundo Rodriguez, president of customs broker Nestor Reyes Inc., calls it the backbone of his company and of the industry.

"Before faxes, cargo would sometimes arrive before the shipping documents, adding warehousing costs to the client," said Rodriguez. "Faxes and now e-mail allow for shorter administrative cycles, with ships’ cargo ready to be unloaded as soon as it arrives at the port, lowering inventory costs."

The island’s cargo transportation industry is connected worldwide through maritime and airline carriers offering a multitude of services. Cargo can arrive at overseas destinations overnight through aviation companies that specialize in freight transport or through passenger airlines that provide special cargo services. On the other hand, maritime carriers’ competitive rates and huge amounts of space are convenient for companies with bulk-cargo transportation needs.

Statistics indicate the value of Puerto Rico’s total exports was $46.90 billion in fiscal year 2002, a 0.57% reduction in comparison with $47.17 billion in 2001. The value of imports also fell, from $29.15 billion in fiscal year 2001 to $28.98 billion in fiscal year 2002, a 0.58% contraction.

Sailing the seven seas

CSX Lines, as Maersk Sealand’s agent in Puerto Rico, has the most diverse itineraries of Puerto Rico’s four local carriers. In December 2002, it was sold by parent company CSX Corp. to Washington’s The Carlyle Group for $300 million. The transaction is expected to be finalized in summer 2003, when the ocean carrier’s name will be changed to Horizon Lines Ltd.

"CSX Lines provides carrier services to domestic markets such as Puerto Rico, Alaska, Guam, and Hawaii," said Gabriel Serra, CSX Lines division vice president & general manager for Puerto Rico. "Each week we have three sailings to and from San Juan to Jacksonville, Fla.; one sailing to Elizabeth, N.J.; and another to Houston."

Maersk Sealand was recently named 2002 Company of the Year by Containerisation International, a British magazine. The carrier’s financial reports showed its operation was financially successful and not cross-subsidized by parent company A.P. Moller’s considerable interests. The company operates 267 vessels, has a capacity of more than 700,000 TEUs, and offers 93 separate services worldwide.

Sailing the U.S., the Caribbean & Latin America

"Crowley’s barges make four southbound / northbound sailings from Jacksonville to San Juan and one southbound / northbound sailing from Pennsauken, N.J., every week," said Crowley spokesman Mark Miller. "With five sailings in each direction, there is almost a sailing a day."

The New Jersey-based carrier also offers services between the U.S. mainland and the U.S. Virgin Islands, the Dominican Republic, and Eastern Caribbean islands. The carrier’s international services extend to Latin American countries such as Guatemala, Honduras, El Salvador, Colombia, Venezuela, Costa Rica, Panama, Nicaragua, and Mexico. It is also the only company with direct service to Cuba.

Sea Star Lines also transports freight to and from the U.S. and Puerto Rico, the Dominican Republic, and the U.S. Virgin Islands, said Sea Star General Manager John Emery. The industry’s newcomer, Sea Star bought Sea Barge in 1998 and proceeded to switch its equipment to self-propelled vessels.

"Sea Star is a regional carrier with agreements with other worldwide carriers to bring cargo to Puerto Rico, but our company deals strictly in domestic cargo," said Emery. "This is where we make our more direct effort. Of course, we can get a container to another carrier that delivers in the Caribbean and will accept cargo from the Far East to the Caribbean."

Trailer Bridge has four vessels making two sailings each week between Jacksonville and San Juan. Trailer Bridge President John McCown said, "One sailing involves two of our tripledeck roll-on / roll-off barges, which at 736 feet are the largest such barges in the world. The other sailing involves two of our Triplestack Box Carriers, the newest vessels in the Puerto Rico lane and the first in the world built exclusively to handle 53-foot containers," said McCown.

Trailer Bridge has another three Triplestack Box Carriers chartered out to operators for various nonlocal-project freight movements. In addition, the carrier owns more than 3,000 containers and 200 tractors, representing an investment of more than $100 million in Puerto Rico.

Flying freight

Most airfreight is made up of time-sensitive, temperature-controlled, or lighter-load cargo such as chemicals, food products, U.S. Postal Service mail, business documents, and miscellaneous packages. While airfreight accounts for only 4% of the total cargo volume entering and leaving the island, its value is estimated at $30.4 billion, or 40% of the total trade value ($76.1 billion).

In manufacturing products alone, the value of chemical industry exports was $3.6 billion during fiscal year 2002, a 12.5% increase compared with $3.2 billion in fiscal year 2001. Chemical product imports were valued at $8.9 billion, a 25.3% increase over fiscal year 2001’s $7.1 billion.

Carolina’s Luis Muñoz Marin (LMM) International Airport, at 1,600 acres, is the largest air cargo and passenger terminal in the Caribbean and Latin America and ranks among the 20 largest airports in the U.S. LMM, a hub for major and feeder airlines carrying cargo and passengers to the island’s 10 regional airports and the Caribbean, moved 731.4 million pounds of cargo during fiscal year 2002, a 6.2% reduction in comparison with 780.1 million pounds in fiscal year 2001, a reflection of the weak economy.

According to data from the Puerto Rico Ports Authority, nearly 40 airlines offer direct or indirect airfreight services from Puerto Rico to most major cities in the U.S. and Canada. In the Caribbean, frequent service is available to the U.S. Virgin Islands, the Dominican Republic, Jamaica, and Haiti as well as to other British, Dutch, and French islands.

Regular airfreight transportation to Latin American countries is also available, with direct services to countries such as Mexico and Panama. From there, transshipment services are available to more than a dozen countries, including Colombia, Costa Rica, Guatemala, Nicaragua, Honduras, and El Salvador. Iberia has daily flights to Madrid, from where it transships cargo to dozens of other cities in Europe. U.S. hubs in New York, California, and Florida provide cargo service transfers to countries in Asia and the Middle East.

Express air carriers such as FedEx Corp., UPS, the U.S. Postal Service, Emery Worldwide, DHL Worldwide, Airborne, and Amerijet handled 243.8 million pounds in fiscal year 2002, 33% of the total 731.4 million-pound market. FedEx clearly dominated the segment, carrying 101.3 million pounds, 41.5% of the 243.8 million pounds. UPS followed with 34.9% (85.2 million pounds).

Airfreight services include overnight transport (one-and two-day delivery), door-to-door, airport-to-airport, station-to-station, priority mail, and, in some instances, electronic document transfer. Today’s information technology makes it imperative that companies also offer customers electronic services such as package traces, invoicing, and even package destination changes. Most carriers have networks throughout the Americas, Europe, and Asia.

Passenger airlines have also benefited from carrying the lighter freight-loads that used to be transported on cargo vessels. American Airlines’ cargo division handled 62 million pounds of cargo in fiscal year 2002, or 8.5% of the total 731.4 million-pound market, making it by far the largest transporter of passenger cargo.

"American Airlines moves freight all over the world, in addition to our direct flights and connections in the U.S.," said Russell Santiago, American Airlines cargo sales manager. "After 9/11 domestic freight-loads decreased in light of the affordability of maritime transportation, so our company began focusing on international markets. American Airlines is able to provide next-day service to San Francisco as well as to London, Paris, Brussels, Amsterdam, and even Tokyo, thanks to our frequent connections between San Juan and New York."

The airline also offers competitive airfreight connections to destinations not on its itinerary through its OneWorld partners. Interairline agreements provide cargo transport services to Zurich, Bombay and New Delhi in India, and China.

Another alternative is international airlines such as Iberia and Copa, which provide daily or weekly cargo transportation services to specific regions. Established in Puerto Rico since 1949, Iberia, Spain’s official airline, opened the doors to most countries in Europe, Africa, and the Middle East.

"Iberia’s daily flights from San Juan connect through Madrid to almost all of Europe," said Iberia Cargo Supervisor Maria Carmona. "We can deliver packages to France, the United Kingdom, Italy, Portugal, Ireland, Israel, and Germany, in addition to cities like Brussels, Luxembourg, and Vienna. Other destinations include Casablanca, Morocco; Malabo, Equatorial Guinea; Johannesburg, South Africa; Dakar, Senegal, and Cairo, Egypt."

Copa’s twice daily flights to Panama extend to 29 cities in 19 countries throughout the Americas and the Caribbean. Based in Tocumen International Airport, the airline flies at least twice a week from Panama to North America, the Caribbean, Central America, and South America. Copa also has a strategic code-sharing alliance with Continental Airlines which enhances its reach to nearly 500 cities around the world. Several domestic airlines in Puerto Rico also extend cargo services to the U.S. mainland and internationally. Among them are US Airways, Delta Air Lines, United Airlines Cargo, and Martinair Cargo.

"US Airways flies to Philadelphia, Pittsburgh, and Charlotte [N.C.] three times a week," said US Airways Manager Jose Pla. "On Feb. 15 we added a direct flight to Boston. Through our international network, however, we fly daily to Madrid; Rome; Paris; London and Manchester, United Kingdom; Frankfurt and Munich, Germany, and Amsterdam, Netherlands. In May we will add Shannon and Dublin in Ireland."

United Airlines Cargo provides freight transportation services from nine U.S.-based gateways to 29 countries on five continents. It flies four times a week from San Juan to Chicago, Washington, and New York.

Martinair has 11 weekly flights from San Juan to its U.S. hubs in Miami and Orlando, Fla. From there it flies cargo to the Netherlands, Costa Rica, the Far East, Africa, and the Mediterranean. It has 180 destinations in Europe alone.

Over the years, the island has woven a carefully constructed network of routes and connections to hundreds of direct destinations and thousands of cities worldwide. In these uncertain times, when global economies are waiting to see if the world’s superpowers reach agreements that will bring peace and an end to economic recessions, Puerto Rico’s connectivity to destinations across the globe is one of the island’s most appealing competitive traits.

Impact of war on Puerto Rico hangs by a wing and a sail

Cargo volume continues to dictate freight rates in most trade lanes, which means a military strike on Iraq could reduce the number of vessels available for maritime and freight cargo and impact our freight rates. However, cargo transportation companies interviewed by CARIBBEAN BUSINESS say they aren’t worried about service schedules affecting the island’s trade movements.

Economic Development & Commerce Secretary-Designate Milton Segarra says the Puerto Rico government has already finalized an interagency contingency plan that includes private-sector representatives and should be ready for implementation if war with Iraq breaks out.

"We have produced an all-encompassing plan to minimize the economic impact of a war," Segarra said. "It includes strategies in the energy, tourism, manufacturing, commercial, agricultural, public works, infrastructure, maritime & air transportation, price control, and job market sectors."

Still, if war does break out, the estimates for its impact on the island’s economic growth are inauspicious. "If the war lasts a short time and the price of petroleum averages $31 per barrel or less, the impact on Puerto Rico’s economic growth in 2003 would be 1.6% to 2.2%," said Segarra. "If the war lasts longer than six months and the per-barrel price of petroleum averages between $32 and $38, it would have an economic impact of between 1% and 1.5%. A prolonged war, where the price of petroleum averages $41 per barrel or more, would bring almost zero growth."

By February, the U.S. Maritime Administration (Marad) had activated 36 Ready Reserve Ships (out of 72 useful ships on reserve) to carry Military Sealift Command cargo related to the military buildup in the Middle East. While it is unlikely any of Puerto Rico’s freight vessels or airplanes will be called into service, cargo transportation companies could be affected by Marad’s use of their vessels elsewhere around the globe.

"Various Crowley companies maintain, crew, and operate ships for Marad," said Crowley Liner Services spokesman Mark Miller. "These ships are owned by the government and aren’t used commercially.

"While it is conceivable Crowley barges could be used in a time of war, we don’t expect that to happen because to use the vessel effectively, you would need a triple-deck shoreside ramp to load and discharge cargo," continued Miller. "Such ramps don’t exist outside of Crowley service areas. In the event of war, we expect no disruption of our service to the people and businesses of Puerto Rico."

The airfreight industry, however, is perhaps more susceptible, since U.S. Federal Aviation Administration regulations dictate that all U.S. airplanes may be used during a time of war, whether to transport cargo or military personnel. Accordingly, to ensure a domestic air fleet is available at all times, foreign investors aren’t allowed to own more than 30% of a domestic airline.

American Airlines Cargo Sales has been preparing for a military conflict by implementing contingency plans throughout its worldwide network. "If a war breaks out in Iraq, there are emergency plans ready to be implemented," said American Airlines Cargo Sales Manager Russell Santiago. "The airline has been focusing on international cargo business since 9/11 because we noticed a sustained reduction in domestic airfreight transportation. Adjustments to our itineraries, if any, will depend on the length of the war."

US Airways Manager Jose Pla remembers the effects of the Gulf War and labor strikes on the airline and is optimistic. "In the past, our contingency plans have prevented any disruptions to our flight schedules. As we face a possible war, we may lose a plane’s capacity somewhere within our entire system, though probably not in Puerto Rico. However, that loss would be made up for by using smaller planes."

Security at Puerto Rico’s ports

Since 9/11, Puerto Rico’s air and maritime transportation systems have had to contend with new, tighter security regulations and new federal laws.

William Uberti, local U.S. Coast Guard captain of the port, has already activated a sea marshal program for the ports in Puerto Rico and in the U.S. Virgin Islands. Sea marshals use risk analysis to select vessels for boarding. U.S. Coast Guard cutters and smaller patrol boats provide escort to make sure vessel masters and their crew maintain control at all times.

The U.S. Customs Service has reported no incidents in Puerto Rico’s cargo industry since the agency began enforcing its 24-hour advance manifest regulation Feb. 2.

"So far, the program has taken off with no problems, probably because of the two-month adaptation period started in December 2002," said U.S. Customs spokeswoman in Puerto Rico Isabel Vazquez. "Since carriers are supposed to be automated by now, the information is electronically relayed to U.S. Customs headquarters in Washington."

The regulation demands maritime carriers or nonvessel operating common carriers (NVOCC) provide U.S. Customs with detailed descriptions of a container’s contents 24 hours before the container heads out from a foreign port to the U.S., including Puerto Rico. Violators will receive a "Do Not Load" message from U.S. Customs with instructions not to load the container. If disregarded, the container won’t be allowed to be unloaded at any U.S. port.

It is the price of fuel, though, which has the greatest impact on cargo carriers’ bottom line. Some companies estimated oil prices have increased 35% to 50% in the past six months and up to 200% in the past year. Most of them are imposing bunker surcharges on oil to try to recover some of the costs (CB Feb. 13).

"With oil prices continuing to rise, we are paying more than $30 per barrel," said Sea Star Lines General Manager John Emery. "The cost of fuel per slot, or container, was $201 on June 4, 2002. When things started to heat up with Iraq and after Venezuela’s hike, the cost rose to $208 in November 2002. In mid-January, the cost of fuel per slot was $272. I don’t expect that trend will change any time soon."

Maritime and air cargo companies have also invested millions of dollars to secure their terminals’ perimeters and warehouses throughout Puerto Rico, installing new lighting and new fences and adding security guards. Freight companies have implemented new technology to track cargo and deliver on-time manifests to federal authorities, to improve efficiency in loading and unloading freight, and to keep track of personnel entering or exiting cargo areas.

These are just some of the measures that have been taken to safeguard U.S. borders. In November 2002 President George W. Bush signed the law creating the Department of Homeland Security, which oversees 22 federal agencies and more than 3,000 employees nationwide. Its four divisions include Border & Transportation Security; Emergency Preparedness & Response; Chemical, Biological, Radiological & Nuclear Countermeasures, and Information Analysis & Infrastructure Protection.

Existing federal agencies were incorporated into Homeland Security, among them the Customs Service, Immigration & Naturalization Service and Border Patrol, and Animal & Plant Health Inspection Service. The recently created Transportation Security is responsible for securing all modes of transportation and directly employs airport security and law enforcement personnel. The Federal Protective Service (General Services Administration), meanwhile, safeguards government buildings.

President Bush also signed the Maritime Transportation Security Act of 2002 last November, which may have prompted the largest restructuring of U.S. transportation, trade facilitation, and border security sectors of the past 50 years. Federal agencies such as the U.S. Customs Service and the U.S. Coast Guard may now take an active role in drafting security plans at each port.

The act also mandates that all ports must create local security committees and design comprehensive security plans, individuals who enter secure areas on vessels or facilities must have background checks and ID cards, incoming vessels must file 24-hour advanced manifests (which began on Feb. 2), there must be a sea marshal program at each port, and the Coast Guard must assess the security at certain foreign ports to determine if vessels will be denied entry to the U.S.

This Caribbean Business article appears courtesy of Casiano Communications. For further information please contact www.casiano.com

www.oaoa.com By Julie Breaux Odessa American

Futures contracts on West Texas Intermediate crude oil traded wildly Thursday amid fears of an imminent U.S. invasion of Iraq and concerns over tight crude oil inventories. At the New York Mercantile Exchange, front-month April crude oil futures climbed as much as $2 to $39.99 a barrel, the highest level since October 1990, when prices set a record high of $41.15 after Iraq’s invasion of Kuwait. The contract settled at $37.20 a barrel, down 50 cents. On London’s International Petroleum Exchange, the volatility was less extreme. April Brent ended down three cents at $33.04 a barrel. Morris Burns, executive vice president of the Permian Basin Petroleum Association, said Thursday’s trading was reminiscent of the Gulf War. “This happened before the first Persian Gulf War in late 1991, early ’92. We had a price runup and it got around $40, but as soon as the first shots were fired, it got back down to around $25,” Burns said. Thursday’s early gains came amid concerns over tight U.S. crude inventories — now at their lowest level since 1975 thanks to cold weather and a strike in Venezuela — and growing jitters over a possible U.S.-led attack on Iraq, traders said. But, the U.S. government lowered its terror threat level from high to elevated — Orange to Yellow — citing the end of the Muslim hajj pilgrimage as a key factor, a move that pared oil’s gains, traders said. Nonetheless, Odessa mineral and royalty investor Kirk Edwards called Thursday’s surge in both crude oil and natural gas prices “absolutely bizarre.” Concerns over dwindling natural gas supplies lifted natural gas prices more than $2 on Monday to close at $9.14 per 1,000 cubic feet. On Thursday, natural gas for March delivery rose 9.5 cents to settle at $7.49/mcf. Edwards said the most recent drawdown of stored natural gas was the largest ever, “putting it on a record pace to be the lowest mark in storage history when the winter ends.” In Texas, sub-freezing temperatures Monday and Tuesday sent demand for natural gas and electricity soaring, said Bill Loos, general manager of Odessa-Ector Power Plant, the 1,000-megawatt natural-gas fired plant that generates power for Texas intrastate power grid. “We were very fortunate. We were not curtailed during the cold spell,” Loos said. In fact, the Odessa plant’s demand load increased as some natural gas providers curtailed supplies to power companies in East Texas in order to meet their own customers’ heating demands, Loos said. The supply imbalance sent the spot price electric companies pay for natural gas into orbit, Loos said. On Monday, the spot price of natural gas for 1 million British thermal units was $13.89. On Tuesday, the price almost doubled to $25.10/mmBtu, falling to $15/mmBtu on Wednesday. And electrical prices followed suit, Loos said. Electrical prices that usually run $40 per 1 megawatt-hour skyrocketed anywhere from $200 to $1,000 per megawatt-hour. The surge in energy prices, however, is having little effect on new drilling activity in the Permian Basin, Edwards said. But that doesn’t mean producers aren’t profiting from current production. “I would say probably across the board every oil-related company is making more money than they have because they’re not spending it on drilling right now,” Edwards said. “Even though prices are great, people are still on the sidelines, which means they’re flush with cash, not flush with drilling prospects.” Edwards said the lack of new drilling indicates to him that producers aren’t convinced the current price is anything but an anomaly. Still, those public school districts in the Permian Basin that depend on oil and gas production for tax revenue will be “very pleased” when they prepare their 2003-04 budgets this fall, Edwards said. “Ad valorem taxes that the oil companies will pay will be substantially higher next year due to the very high prices the year started out with,” Edwards said. Of the nearly $68 million in ad valorem taxes ECISD expects to collect in fiscal 2002-03, about $20 million will come from minerals, said Tonya Tillman, ECISD director of finance. The Associated Press contributed to this report. 

www.oaklandtribune.com108341211388,00.html Article Last Updated: Friday, February 28, 2003 - 7:08:06 AM PST

Crude oil prices retreat Crude oil fell after traders who use charts, graphs and other technical tools to make decisions sold contracts after prices failed to surpass $40 a barrel. As prices fell, the U.N. Security Council met to discuss a resolution presented by the U.S. and the U.K. that says Iraq has missed its last opportunity to disarm, paving the way for a U.S.-led invasion. Prices have soared 39 percent in the past three months as a strike cut oil exports from Venezuela and the U.S. threatened to attack Iraq Crude oil for April delivery fell 50 cents, or 1.3 percent, to $37.20 a barrel on the New York Mercantile Exchange. Oil rose to $39.99 a barrel during the session, the highest price since Oct. 12, 1990, when Iraq's occupation of Kuwait led to the cutoff of exports from both nations.

Comcast losses shrink Philadelphia-based Comcast Corp., the Bay Area's cable provider, posted a narrower fourth-quarter loss in its first report since buying AT&T Broadband. The company raised a 2003 profit estimate and said it expected to stop losing subscribers this year. The net loss shrank to $51 million, or 3 cents a share, from $321 million, or 34 cents, a year earlier. Sales rose 11 percent to $5.73 billion. The results were reported as if the acquisition had been completed in January 2001 instead of November. Chief Executive Officer Brian Roberts has pledged to make the former AT&T cable systems profitable by trimming costs and stemming subscriber losses.

Lucent says SEC probe over New Jersey-based Lucent Technologies Inc., the biggest U.S. maker of telephone equipment, said it settled an SEC probe of $679 million in improperly recorded sales. Lucent doesn't have to pay any penalties or restate results, and the company agreed to abide by federal-securities laws. The SEC began its investigation of Lucent after the company reported the misstated revenue to regulators in late 2000, Lucent Chairman and Chief Executive Officer Patricia Russo said. At issue was the initial booking of $679 million in sales and later adjustment of fiscal 2000 revenue to exclude that amount after customers returned some unused equipment.

IBM to fire workers IBM Corp., the world's largest computer maker, is firing some employees in its U.S. software and services units as the company seeks to match worker skills with customer needs. Less than half of one percent of workers in the units is being fired, spokesman James Sciales said. The services business has 180,000 workers and there are 35,000 in software, Sciales said. IBM is rebalancing its workforce to ensure workers have the skills customers want, Sciales said. Chief Executive Samuel Palmisano has been trying to revive sales by adding products and service offerings. Services, bolstered by the October purchase of PricewaterhouseCoopers LLP's consulting unit, helped boost fourth- quarter sales 7 percent to $23.7 billion.

'Grand Theft' pays off New York-based Take-Two Interactive Software Inc. said first-quarter profit rose 45 percent because of higher revenue from the best-selling video game series "Grand Theft Auto." It raised sales and profit forecasts for the year. Net income in the quarter ended Jan. 31 increased to $50.5 million, or $1.20 a share, from $34.8 million, or 92 cents, a year earlier, the company said. The results exceeded company forecasts from December, driven by the popular sequel "Grand Theft Auto: Vice City." "Vice City," in which players can listen to Judas Priest and other 1980s pop music while running missions for drug lords, was the best-selling video game in the U.S. last year and has sold 8.5 million copies.

Novell sees slumping numbers Utah-based Novell Inc., a maker of software for managing computer networks, said it had a first- quarter loss on higher marketing costs and as sales declined 6.4 percent amid a slump in demand for business software. The net loss in the quarter ended Jan. 31 was $11.9 million, or 3 cents a share, compared with net income of $8.4 million, or 2 cents, a year earlier, Novell said. Sales fell to $260 million from $277.9 million. Novell has been expanding into new products to make up for slowing sales of its NetWare operating system software, which lost market share to Microsoft Corp.'s Windows programs in the 1990s.

Kmart executive to cooperate Kmart Corp., the bankrupt retailer seeking to exit Chapter 11 by the end of April, said the former head of its supply chain has agreed to cooperate with an investigation into the company's former management. Anthony D'Onofrio will testify and provide any documents he may have related to the investigation in return for Kmart dropping a request that he be held in contempt, according to a filing with the U.S. bankruptcy court in Illinois. Kmart said it filed seven subpoenas over several months to try to get D'Onofrio to cooperate with an investigation into the previous management and its accounting practices. Two former Kmart vice presidents were indicted yesterday on U.S. charges they overstated revenue in the first criminal case stemming from the retailer's bankruptcy.

reuters.com Fri February 28, 2003 10:47 AM ET (The following statement was released by the ratings agency)

NEW YORK, Feb 28 - The Petrozuata Finance Inc. (B/Watch Neg/--) heavy oil production and processing project in Venezuela has restarted operations following the delivery of natural gas and hydrogen feedstocks to the upgrader. The company is operating the upgrader at 75% of capacity, and plans to return to normal production rates on March 1.

Field production is ramping up as upgrader charge rates rise. While these developments are positive, the ability of Petroleos de Venezuela S.A. and third parties to provide a stable supply of feedstocks remains questionable, given the continued political and social divisions in the country. Petrozuata plans to have 800,000 barrels of syncrude production shipped to ConocoPhillips in early March. The company's liquidity position remains adequate for the very near term, with about US$70 million in a six-month debt service reserve and about US$190 million to US$200 million in cash. This liquidity will enable Petrozuata to meet its April 2003 semiannual debt payment. To consider taking positive actions on Petrozuata's rating, Standard & Poor's will need a longer demonstration period of consistent feedstock supply and performance under recently announced foreign exchange controls. Furthermore, Standard & Poor's will need to achieve greater confidence that labor strife will not reignite in the near future.

www.coshoctontribune.com By KATHY THOMPSON Gannett News Service

CARY ASHBY/Tribune Robert Brown of Coshocton fills up his vehicle at Clark High Caliber Pit Stop on Chestnut Street. Regular unleaded gas prices around the state ranged from $1.54 per gallon to $1.74 Thursday. Pit Stop customers paid $1.62.

COSHOCTON -- They're heating up all across the country. Prices for gas and oil, that is.

Gas bills seem to have consumers coming and going these days with the cost of heating oil and crude oil rising quicker than temperatures.

The unfortunate fact is prices are probably not going to go down soon.

With Venezuela strikes and unrest in the Middle East, very few are actually "filling up" their tanks in their vehicles.

Heating homes is becoming more expensive with bills exceeding $100 to $300 more this year than last, according to the Energy Information Administration.

Heating oil prices rose 18.1 cents per gallon to their highest level in three years, reports the U.S. Energy Information Administration, or the EIA, the statistical arm of the U.S. Department of Energy.

That makes it $1.76 per gallon, more than 56 cents higher then last year.

According to Columbia Gas of Ohio, which has about 1.3 million customers throughout Ohio, the average bill could be more then $35 a month higher from February to April this year.

Ray Frank, a spokesperson for Columbia Gas, said consumers are getting hit with "three strikes at one time."

"What we have is colder weather, more consumption and higher prices," Frank said.

"We're having what we call colder degree days," Frank said. "That means we are at 5 percent colder this winter than a normal winter."

But, what is considered a normal winter has not hit this area for several years, which is why consumers are feeling the crunch, Frank said.

"We start our heating weather, as we call it, in November," Frank explained. "Starting in January, we usually have a few days a month or even more during a month, where the temperatures are warming up and we don't notice the cold so much. But, this winter, we really started getting cold in November and we've stayed cold. There's just been no letting up."

The result is higher demand on a market that is short in supply, Frank said.

"With the talk of war in Iraq, with the rush on the market for fuel, we're all in the same boat -- us, the gas stations, the other fuel companies, we're all hurting," Frank said.

Kno-Ho-Co-Ashland Community Action Commission has seen an increase in clients this winter who are in an emergency situation regarding their home heating bills.

"We've seen an increase of about 32 percent this winter," said John Flexter, a HEAP administrator.

"I think it's gas prices, the way the economy is and just the way the winter has gone that's affecting everyone," Flexter said. "This is a pretty normal winter for Ohio. For the past few years, we've had mild winters."

Flexter suggests turning the thermostat down, turning the hot water thermostat down to 120-125 degrees, and using low heat for gas dryers to save on home heating bills.

"Making sure the house is as closed up as possible can save money," Flexter said.

One thing consumers are encouraged to do to help offset costs is to shop around.

"We encourage customers to shop around the other gas companies," Frank said. "That is always a plus for them. Sometimes they can find much better deals if they just look."

Prices around the state ranged from $1.54 per gallon to $1.74.

According to a national survey by AAA, the national average price per gallon is $1.66, almost 54 cents above the national average this time last year.

AAA recorded the highest priced gasoline in California, with prices almost to the $2 mark. Prices in Kentucky and Virginia were recorded at some of the lowest at $1.58 per gallon, the survey showed.

J.D. Cunningham, an employee at Kwik-Fill in Coshocton, said prices at their station were low "most of the time."

"We had a special on Tuesday where we were at $1.66 a gallon," Cunningham said. "We've been pretty busy today, though."

No matter where the price for gas lands these days, some residents just are not happy with them.

"I haven't really heard anyone complain about the prices," Flexter said. "Well, I've been complaining. I've probably complained for most of them, myself. It's a shame where the prices are, but it looks like they may be here awhile."

kthompson@nncogannett.com 450-6764 Originally published Friday, February 28, 2003