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Management Update

Staff -- Logistics Management, 5/1/2003

  • Truckers both gained and lost time under new hours-of-service rules. The Federal Motor Carrier Safety Administration (FMCSA) has issued its revised hours-of-service rules for truckers, which take effect Jan. 4, 2004. Drivers may now operate a vehicle for up to 11 hours, an increase of one hour over what's allowed under the current rules, but are limited to 14 total hours of service in a duty period. Only the use of a sleeper berth may extend the on-duty period. In addition, each duty period must now begin with at least 10 hours of off-duty time, rather than the current 8 hours. An earlier proposal to require electronic on-board trip recorders was dropped from the final rule. The government proposed the new limits to ensure that truck drivers receive sufficient rest to reduce fatigue-related crashes. For a complete copy of the rules, along with an information brochure for drivers, go to www.fmcsa.dot.gov/Home_Files/hos/revised_hos.asp.

  • The new hours-of-service rules generated a veritable tidal wave of public comments before they were finalized. According to Richard P. Schweitzer, general counsel for the National Private Truck Council (NPTC), the FMCSA received an astonishing 53,750 public comments on the proposed regulations. That may well be the record for comments on a U.S. Department of Transportation Notice of Proposed Rulemaking. Schweitzer spoke about the impact of the new rules at NPTC's annual conference in St. Louis last month.

  • The final numbers are in, and total U.S. logistics costs in 2001 were lower than expected. That's the word from Robert V. Delaney, whose annual "State of Logistics" report has become the standard for calculating the nation's overall logistics costs. Last year Delaney, a vice president at Cass Information Systems and a consultant to property developer ProLogis, and economist Rosalyn Wilson had projected that total logistics costs for 2001 would amount to some $970 billion. But new data from the U.S. Department of Commerce led them to revise their forecast downward, to $957 billion. The updated data revealed a smaller national Gross Domestic Product and less money spent on trucking in 2001. The cost of inventory and expenditures on air freight, on the other hand, were higher than expected. Delaney and Wilson will issue their estimate for 2002 logistics costs in Washington, D.C., next month.

  • Are you having a seemingly unsolvable dispute over a freight claim with a motor carrier? Then consider turning to an arbitrator for help. Arbitrators take evidence, hear arguments, and issue binding or non-binding decisions or awards, depending on what the parties to the dispute agree on. One group that specializes in transportation and logistics disputes is the Transportation Arbitration Board (TAB), a non-profit organization affiliated with the Transportation Consumer Protection Council (TCPC) and the Transportation Loss Prevention & Security Association (TLPSA). TAB's arbitrators, all certified claims professionals, can help resolve smaller motor carrier loss-and-damage claims at a reasonable cost. Another group that sponsors transportation arbitration services is the Transportation Lawyers Association. Contact information for transportation arbitrators endorsed by these groups can be found at www.transportlaw.com/TAB.htm

  • Third-party logistics providers (3PLs) dominate the U.S. commercial warehousing market, say 3PL analysts Armstrong & Associates. Logistics service providers utilized some 485 million square feet of commercial and contract warehousing space out of the estimated 650 million square feet available in the United States. Commercial warehouses account for about 10 percent of the total U.S. warehouse space. By the way, Exel has the most warehousing space in North America among the 3PLs, with 56.5 million square feet. Next in line are APL Logistics, UPS Supply Chain Solutions, and Americold.

  • Why did the big unionized LTL carriers seek a five-year labor pact with the Teamsters? Answer: LTLs wanted their labor contract to expire before the Teamsters' pact with United Parcel Service finished up, said Tim Lynch, chief executive officer of the Motor Carriers Association, which represented motor carrier management in the recent labor talks. "UPS has more money than we do, so it's beneficial for us to negotiate first," Lynch told NASSTRAC members at the shipper group's spring meeting. UPS reached its labor accord with the Teamsters this past summer, about six months ahead of the LTL carriers' agreement with the union.

  • The United States will no longer be going it alone on trade security. The World Customs Organization will soon approve an international data model to provide all the information required by member agencies to assess cargo security risks. It also will develop guidelines for formatting and scheduling data submissions. "This could make it possible for the foreign exporters to send data to their home countries' customs agencies, which would then forward it to U.S. Customs," suggested FedEx Trade Networks vice president Arthur Litman at the Coalition of New England Companies for Trade (CONECT) annual conference last month. A universal standard could also open the way for foreign exporters to send information themselves to U.S. Customs via the carrier, rather than placing responsibility on U.S. importers, he said.

  • New York City wants all truckers to carry truck-route maps or face a fine. The New York City Council is considering an ordinance requiring all truck owners to supply their drivers with color maps depicting the legal routes that trucks may use when traveling through the Big Apple. In addition, drivers must have a route manifest indicating each shipment's origin and destination. Failure to comply could result in fines of up to $250 per violation. The City Council also is asking the state legislature to increase penalties for motor carriers that do not comply with truck-route signs.

  • Rail shippers are promoting a new bill to heighten rail competition. Legislation filed in the Senate by Conrad Burns (R-Mont.) would clarify the nation's rail transportation policy to include the need to promote effective competition among rail carriers at both origins and destinations. The Railroad Competition Act of 2003 (S. 919) would also state the need to maintain reasonable rates in the absence of effective competition, and would eliminate barriers to competition between Class 1, 2 and 3 railroads. Shipper groups such as the American Chemistry Council, Consumers United for Rail Equity, and the Alliance for Rail Competition are supporting the bill.

  • The United States and Canada will soon share information to ensure compliance with NAFTA's rules of origin. The U.S. Bureau of Customs and Border Protection and the Canada Customs and Revenue Agency agreed last month to exchange data to ensure that only qualifying goods receive the preferential tariff treatment provided under the North American Free Trade Agreement (NAFTA). The pact may be a small step toward patching up relations between the two countries, which have become increasingly strained over border security.

  • FedEx Freight now has an Asian Connection. The regional LTL trucker is offering service from Asia to virtually all points in the continental United States in conjunction with sister companies FedEx Ground and FedEx Trade Networks. FedEx Trade Networks facilitates the containerization of shipments in Asia; manages ocean transportation, customs clearance, and document preparation; and deconsolidates containers into individual shipments. FedEx Ground and FedEx Freight handle the inland transportation and delivery of the resulting small-package and LTL shipments, respectively.

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