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Overview & History
Horizon Lines is the nation's leading Jones Act container shipping and logistics company, accounting for approximately 37% of total U.S. marine container shipments between the continental U.S. and the three non-contiguous Jones Act markets, Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Lines, Inc. trades on the New York Stock Exchange (HRZ). Horizon Lines' long operating history dates back to 1956, when Sea-Land Service, Inc. pioneered the marine container shipping industry and established our business. Today, as the only Jones Act vessel operator with one integrated organization serving Alaska, Hawaii, Guam, Micronesia and Puerto Rico, we are uniquely positioned to serve customers requiring comprehensive shipping and logistics services in more than one of these markets. Our commitment to innovation and service has attracted a broad and diversified customer base. We ship a wide spectrum of consumer and industrial items used everyday in our markets, ranging from foodstuffs to household goods and auto parts to building materials and various materials used in manufacturing. The cargos we ship are vital to the expanding populations in our markets, providing us with a stable base of growing demand for our shipping and logistics services. To find out more about our capabilities, technology and history, please explore the following links and the rest of our web site. Why we are uniquely positioned. Find out more about our comprehensive shipping and logistics services. Explore Horizon Lines IT system (HITS). Learn about our containership fleet. Jones Act Under the Jones Act, enacted in 1920, domestic U.S. maritime trade is restricted to U.S. owners of U.S.-built and flagged vessels manned by predominantly U.S.-citizen crews. For more information on the Jones Act, visit the Maritime Cabotage Task Force at http://www.mctf.com/.
Uniquely Positioned Since we are the only Jones Act container shipping and logistics company with an integrated organization operating in all three non-contiguous Jones Act markets, we believe that we have a stronger competitive position in our markets, serve more effectively our national customers with shipping and logistics needs across one or more of these markets, spread our fixed costs over a larger revenue base, achieve greater network operating efficiencies and negotiate larger volume discounts from our inland shipping providers.
Comprehensive Shipping and Logistics Services Our comprehensive services offering includes inland cargo trucking and logistics for our customers through our own trucking operations on the U.S. west coast and our relationships with third-party truckers, railroads, and barge operators in our markets. A key feature of our complete shipping logistics solution is our industry-leading ocean shipping and logistics information technology system, the Horizon IT system, or HITS.
HITS: Horizon IT system We book and monitor all of our shipping and logistics services through HITS. This system encompasses an extensive database of information relevant to the shipment of containerized cargo and captures all critical aspects of every shipment booked with us, including cargo booking, tracking and tracing and the production of bills of lading, customs documents and invoicing. Since the launch of HITS in 2000, we have migrated our customers to the on-line interfaces of HITS, with on-line bookings totaling approximately 50% of our total bookings. We believe that HITS’ functionality and ability to generate cost savings for our customers build strong customer loyalty for our services and enhance our customer relationships. We believe that HITS differentiates us from our competitors as it better positions us to serve higher-margin customers with sophisticated shipping and logistics requirements.
Containership Fleet With 20 vessels and 22,000 cargo containers, we operate the largest Jones Act containership fleet. We maintain our vessels according to our own strict maintenance procedures, which meet or exceed U.S. government requirements. All of our vessels are regulated pursuant to rigorous standards promulgated by the U.S. Coast Guard and are subject to periodic inspection and certification, for compliance with these standards, by the American Bureau of Shipping, on behalf of the U.S. Coast Guard. Our procedures protect and preserve our fleet to the highest standards in our industry and enable us to preserve and extend the usefulness of our ships. In addition, the senior officers on our vessels (masters and chief engineers) have an average tenure with us of over 16 years.
Operating History In 1956, ocean-borne containerization was introduced with the shipment of a Sea-Land container aboard the Ideal-X from Port Newark, NJ to Houston, TX. We introduced container shipping to the Puerto Rico market in 1958, and in 1964 we pioneered container shipping in Alaska with the first year-round scheduled vessel service. We began providing container shipping services between the U.S. west coast and Hawaii and Guam in 1987 through our acquisition from an existing carrier of all of its vessels and certain other assets that were already serving that market. In 1997, Sea-Land led the refrigerated container industry by launching the first fleet of advanced humidity control refrigerated containers. In 2000, we introduced HITS, our industry-leading ocean shipping and logistics information technology system, enabling us to capture all critical aspects of every shipment and allowing our customers to book, track and trace cargo shipments on a real-time basis. Horizon Services Group was formed in 2001 to provide ocean carriers and inland logistics customers world class, cost effective “order-to-cash” services through the integration of people, technology and business systems. A third crane was delivered to the terminal at Sand Island in Honolulu, Hawaii in September of 2003. The $5 million dollar investment in crane, chassis and yard equipment improved productivity by over 30%. In January of 2003, the carrier received its C-TPAT (Customs-Trade Partnership Against Terrorism) certification. Two new cranes arrived in San Juan, Puerto Rico in March, 2004. The two Paceco cranes improved the capacity and productivity, providing heavier lift and up to six-tier lifting capabilities. Horizon Lines now operates four cranes at the San Juan port facility. The company took delivery of 900 new refrigerated containers in December, 2004. The company's equipment experts incorporated design enhancements into the construction of the units, including upgrades to floor and wall units and container air flow. The units are dispatched in all of Horizon Lines' service divisions.
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