Management Update
An executive summary of industry news
Staff -- Logistics Management, 2/1/2003
No matter the shape of the economy, truck rates will rise this year, says a well-known stock analyst. According to Greg Burns of JP Morgan, major shippers were able to hold the line on trucking rates in 2002, but a steady rise in shipment volumes and tonnage should help motor carriers extract modest price hikes when contracts expire this year, he notes. The amount of the increase will vary by region and type of traffic, but Burns forecasts an average price hike of 4 percent.
The West Coast port dispute is finally over, now that the union rank and file have accepted the proposed contract. The Pacific Maritime Association (PMA) last month inked a new six-year contract with the International Longshore and Warehouse Union (ILWU). The agreement provides ILWU members with substantial wage and benefit increases, including fully employer-paid health care, pension hikes and job-protection guarantees for currently registered workers. The pact also allows employers to introduce new technology at container terminals, even though such a move could cost future union jobs. Nearly 90 percent of the ILWU membership voted to approve the contract.
The Mexican truck saga has taken yet another unexpected turn. Late last year, the White House cleared the way for Mexican carriers to operate in the United States under the terms of the North American Free Trade Agreement. But last month a federal appeals court barred their admission in a ruling on a suit brought by a coalition of environmental, labor and public safety groups. That suit charged that the agency should have conducted an environmental impact study before opening the border to Mexican trucks. The 9th U.S. Circuit Court of Appeals ordered the DOT to prepare a full environmental impact statement as required by the Clean Air Act. Now the DOT must decide whether to comply, appeal, or go directly to the U.S. Supreme Court.
U.S. Customs will begin checking up on the security programs of C-TPAT members. C-TPAT—the Customs-Trade Partnership Against Terrorism—requires participating companies to meet certain standards for supply chain security. The agency recently issued its guidelines for conducting on-site validations. In brief, security profiles will be validated within three years of joining C-TPAT, and members will be given 30 days' advance written notice before the commencement of a validation, which will be completed within 10 days. Customs will schedule validations based on several criteria, including import volume and security-related anomalies. Members will have an opportunity to review the findings, which will influence the level of C-TPAT benefits they receive.
Need a few facts about rail shipments in 2001? Then pick up a copy of the 2002 edition of Railroad Facts, published by the American Association of Railroads' Policy and Economics Department. The book offers 80 pages of facts and statistics on railroad finance, traffic, operations, plant and equipment, loss and damage, and more. The pocket-sized booklet focuses on Class I U.S. railroads and contains information for 2001 as well as historical data reaching as far back as 1929. Profiles of major Canadian and Mexican railroads round out the publication. Single copies of Railroad Facts are $5 for AAR members; non-members pay $15 for single copies, with discounts available for larger orders. Order online at www.aar.org.
He's got the whole company in his hands ... Richard G. Phillips, chairman, president and CEO of Pilot Air Freight, the Lima, Pa.-based airfreight forwarder, has acquired all of the company's outstanding stock. Phillips says the ownership consolidation provides stability for Pilot and positions it for future growth. In 2002, Pilot moved more than 374 million pounds of freight and saw business growth of 3 percent. The company operates 65 stations across the United States and has partners in most major shipping destinations worldwide.
Distribution centers are more prone to theft than other types of businesses. So says logistics security specialist Barry Brandman, author of the Warehousing Education and Research Council (WERC) publication, Security Best Practices: Protecting Your Distribution Center. With their high volume of finished (and easily sold) goods, DCs are what Brandman calls "a thief's paradise." The 76-page book covers loss-prevention controls, truck driver and receiving dock theft, white collar crime, and the importance of loss-prevention audits, among many other topics. Order your copy online at www.werc.org or call (630) 990-0001.
Soon you'll be able to train your fleet employees online. The Transportation Management Training Series (TMTS) offered by efleetmgmt, Inc. is a Web-based educational program covering truck-fleet equipment, maintenance, financial management, human resources, safety, logistics and regulatory compliance. Online training allows employers to offer employees continuing education at reasonable cost without the worry of time or location constraints. Twelve courses are available now at www.efleetmgmt.com, with more to come, say company officials.
The National Private Truck Council has upgraded its Web site. The redesigned site—www.nptc.org—features many enhancements, including a more user-friendly environment and expanded content. There's more information about NPTC's educational conferences, seminars and certification programs, plus a host of new features, including the latest news affecting private fleets, an interactive buyers guide, and more members-only content.
FedEx Custom Critical is renaming its CharterAir division to better reflect the range of services it provides. The air charter service of the time-definite, critical shipment carrier will now be called Air Expedite. The name change is intended to highlight the division's ability to work with FedEx sister companies to provide services such as its "Point-to-Point Air Freight" offering. Point-to-Point utilizes FedEx Custom Critical's exclusive-use vehicles for pickups and deliveries, and FedEx Express handles the airlift. Customers get later cutoff times and earlier deliveries. The CharterAir label will still apply to dedicated air charter services.
U.S. Customs will issue "do not load" messages for ocean containers that fail to meet its 24-hour advance manifest regulation. On Feb. 2, Customs began enforcing that rule, which requires carriers and consolidators to provide shipment details for all U.S.-bound ocean containers 24 hours before they are loaded aboard ship. The agency put that rule into effect so it could identify potential terrorist threats before containerized shipments leave their countries of origin. Carriers and NVOCCs that ignore "do not load" messages and place undocumented or unapproved containers on vessels will be denied permission to offload the offending boxes at any U.S. port.
A new satellite monitoring system issues red flags when shipments go awry. Wireless provider Aether Systems Inc. has teamed up with TransCommunications and Mobilacomm Eagle to launch a satellite monitoring system called GeoLogic. The event-driven, exception-based system monitors the location and movement of over-the-road trailers. It also alerts users to out-of-route diversions and notifies them when arrivals or deliveries don't occur on time. Another feature is the ability to trigger time- or distance-based reports of speed, position, load status and direction of travel when a specified set of conditions occur. These features facilitate better asset management while increasing control over vehicle and trailer security, say Aether executives.
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