Up Front

By Staff -- Logistics Management, 7/1/2000

The comment period on proposed hours-of-service rules for truck drivers

The comment period on proposed hours-of-service rules for truck drivers has been extended to Oct. 30. The federal Department of Transportation added 90 days to the comment period following angry protests by motor carriers and others that the original 90-day period did not provide enough time to perform studies on the rules' potential economic effects. The rule, offered by the Federal Motor Carrier Safety Administration, would categorize truck drivers into five groups and place new limits on their work days and work weeks. Opponents of the proposal as drafted fear that if implemented, the rules could disrupt distribution patterns and force truckers to seek thousands of additional drivers. Follow developments at www.logisticsmgmt.com.

Ocean shipping reform appears to be working,

Ocean shipping reform appears to be working, at least for large shippers. A survey of members of the National Industrial Transportation League's Ocean Transportation Committee has found that shippers believe the Ocean Shipping Reform Act (OSRA) is beneficial for their companies. Ninety percent either "completely" or "partially" agreed that OSRA had resulted in positive developments, including the ability to enter into confidential contracts with carriers. Most respondents who use transportation intermediaries, such as consolidators, said they thought intermediaries should be allowed to sign confidential contracts with shippers, a practice that remains prohibited under OSRA.

The shortage of ocean containers that has caused problems for importers

The shortage of ocean containers that has caused problems for importers has spilled over into the domestic arena. The Intermodal Association of North America reports a shortage of domestic containers in southern California for eastbound business. Increased transloading from international to domestic equipment has exacerbated the problem, the trade group says. That practice accelerates the ocean container returns to Asian markets, where the boxes are in great demand, but puts added pressure on already tight domestic capacity.

Electronic commerce gets plenty of ink,

Electronic commerce gets plenty of ink, but retail sales over the Web account for only a small portion of the nation's economic activity. According to an estimate by the Department of Commerce, retail e-commerce sales in the first quarter of the year were $5.2 billion. That's up 1.2 percent from the fourth quarter of last year, but it is still a mere seven-tenths of 1 percent of all retail sales. Even the estimated increase is suspect, as the margin of error for the quarter-to-quarter change is about 3.9 percent. That means Internet retail sales could actually have fallen by as much as 2.7 percent (or risen by as much as 5.1 percent).

The proposed combination of the Canadian National and Burlington Northern Santa Fe railroads

The proposed combination of the Canadian National and Burlington Northern Santa Fe railroads is getting attention from the Canadian government. The government's Competition Bureau has begun a review of the proposal's potential effects. In addition, Minister of Transport David M. Collenette has asked the Parliamentary Standing Committee on Transport to examine the proposal and to provide a public forum for Canadians to comment on the effects of the consolidation. Collenette asked the committee to begin hearings this fall.

Reform of maritime cargo liability law is moving forward.

Reform of maritime cargo liability law is moving forward. Sen. Kay Bailey Hutchison (R-Texas) last month restated her support for legislation that would update the Carriage of Goods at Sea Act (COGSA). Hutchison said that her goal was to provide a single cargo-liability system that would cover intermodal transportation, increase the per-package liability limit, change burden-of-proof rules for determining damages, eliminate the "error in navigation" defense for ship owners, and clarify dispute-resolution procedures.

Air Canada and its Canadian Airlines subsidiary have severed their code-sharing agreement with American Airlines,

Air Canada and its Canadian Airlines subsidiary have severed their code-sharing agreement with American Airlines, effective in October. The carriers cited "incompatibility with current commercial objectives" as the reason for the breakup. American's investment in Canadian Airlines was a sticking point during the initial battle for control of the money-losing Canadian carrier. In place of the agreement with American, Air Canada has initiated a code-sharing agreement with Delta Airlines that will connect Air Canada flights with flights at Delta's U.S. hubs in Atlanta, Cincinnati, Dallas, and Salt Lake City.

"National processing" of customs entries is now a reality.

"National processing" of customs entries is now a reality. At the end of May, A.N. Deringer Inc., based in St. Albans, Vt., became the first customs broker to hold a national permit. The permit allows brokers to handle business for clients anywhere in the United States. Until now, brokers had to open an office and obtain a district permit in each customs district in which they intended to file entries.

The Smithsonian Institute recently honored a transportation company for technological innovation.

The Smithsonian Institute recently honored a transportation company for technological innovation. The information system developed by Interpool Inc., a container- and chassis-leasing company, to track its equipment is now a permanent part of the Smithsonian's National Museum of American History's research collection on information technology. The museum cited Interpool's participation in the design of the standardized cargo container and its ability to track equipment worldwide as key enablers of global economic growth.

Talk, talk, and more talk.

Talk, talk, and more talk. The United States and the United Kingdom are continuing their on-again, off-again discussions over a new aviation agreement. U.S. and U.K. transportation officials met in London in mid-June; more meetings were scheduled to be held in Washington in early July. The issue of mutual landing rights for carriers in both countries, particularly for British Airways and American Airlines, has been festering for several years. British Airways' recent announcement that it hopes to buy KLM Royal Dutch Airline could change the U.K. negotiating position enough to open the way to an agreement. U.S. Secretary of Transportation Rodney E. Slater said last month that he expected to sign a new treaty by the end of this year.

E-commerce will thrive when business processes catch up to the technology.

E-commerce will thrive when business processes catch up to the technology. At least, that was the opinion widely held by logistics experts gathered for the June Leaders in Logistics forum of The Logistics Institute at the Georgia Institute of Technology. Representatives from 35 business and government entities joined with logistics faculty from Georgia Tech and the University of Arkansas to discuss the evolution of e-commerce logistics exchanges. The Leaders program plays a major role in guiding the research and educational activities at The Logistics Institute, a National Science Foundation-sponsored center at Georgia Tech.

The Quest for Quality continues.

The Quest for Quality continues. Readers have voted and the results are in. The August issue of Logistics Management & Distribution Report will feature the 17th annual Quest for Quality report, based on our survey of more than 3,000 readers. The annual poll gives readers a chance to rate their carriers, telling us which of the service providers consistently meet or exceed their expectations. The top-rated carriers will be announced in next month's issue.