The Supreme Court has sided with railroads—and against shippers—in a case involving liability for intermodal shipments.

Last month, the nation's highest court unanimously ruled in the case Norfolk Southern Railway Co. v. James N. Kirby that carriers handling inland cargo can be covered by maritime contracts limiting liability for damages. After its cargo was damaged in a train wreck, the Australian shipper Kirby had sued the railroad, arguing that the limitations in the contract between the forwarder and the ocean carrier did not apply to the railroad. The high court's decision overturned a lower court ruling that favored shippers. For more background on this dispute, see the November 2004 news story, "Supreme Court hears multimodal liability case," available online at www.logisticsmgmt.com.

More cargo inspections will jack up costs and create delays without substantially boosting security,

an ocean carrier executive asserted last month. In a speech at Northwestern University's Transportation Center, Earl Agron, vice president of security for ocean carrier APL, said that inspecting 10 percent of the nation's 9 million inbound containers would require adding 6,000 to 7,000 more customs inspectors to the current workforce. "Even a 10 percent physical exam rate, as suggested by some lawmakers, would be extremely expensive and would cause unacceptable delays to the international supply chain," Agron said. He also questioned the need for more physical inspections, noting that U.S. Customs currently reviews shipping data for 100 percent of inbound cargo containers in order to target those requiring further attention.

Parcel and express shippers can expect higher prices now that UPS and FedEx have announced their 2005 rate increases. Big Brown said rates for UPS Ground, Next-Day Air, 2nd Day Air, 3 Day Select, and international services to and from the United States will rise by 2.9 percent next year. It also said that rates for its LTL alternative, UPS Hundredweight Service, will increase by 5.9 percent. For its part, FedEx announced somewhat steeper hikes, saying that rates for domestic and export services would increase by an average of 4.6 percent. FedEx added that it would lower its fuel surcharge by 2 percent, resulting in a net average price hike of 2.6 percent. Both carriers will also increase some surcharges.

West Coast port congestion is starting to force ocean carriers to alter their sailing schedules. Hamburg Süd last month said it would reduce twice-weekly calls at the Port of Los Angeles for its Australia/New Zealand–West Coast North America Service to one call per week. The carrier said its decision was triggered by continuing congestion problems and mounting delays in working vessels at the Ports of Los Angeles and Long Beach.

Ocean consolidators may soon be allowed to enter into confidential service agreements with shippers. The U.S. Federal Maritime Commission last month issued a notice of proposed rulemaking that would grant that authority to consolidators, known as non-vessel operating common carriers (NVOCCS). At present, only vessel operators are allowed to enter into service contracts. The agency is expected to issue a final ruling by early next year.

Lend us a hand with our annual salary survey. In March, Logistics Management will once again publish the results of our annual salary survey for logistics executives. LM has conducted the compensation study for the past two decades, making it one of the most authoritative in the profession. The more readers who participate in the survey, however, the more comprehensive the results will be. This year, we've made an important change: The questionnaire can only be filled out online. It takes only a few minutes to complete, so we hope you'll do your part and go to www.lmsurveys.com/salary.

And the award for supply chain excellence goes to…Dell. AMR Research last month released a report ranking the top 25 companies embracing supply chain best practices and technologies. The rankings were based in part on financial metrics such as assets, inventory turns, most recent 12 months' growth, as well as AMR analysts' opinions. At the top of the list was Dell, followed by Nokia in second place and Procter & Gamble in third. IBM was ranked fourth, while Wal-Mart Stores rounded out the top five. The complete list is available in the "Press Releases" section at www.amrresearch.com.

A new research report questions whether companies will see a quick payback on RFID. When ARC Advisory Group surveyed 24 companies that are actively investing in radio frequency identification using electronic product codes, only one respondent expected payback in less than two years. In fact, 95 percent of the survey respondents said they believed the payback period would exceed two years. Although respondents aren't happy with that return on their investments, most still plan to go ahead with implementing RFID in order to comply with demands by large retailers that suppliers mark cases and pallets with RFID tags carrying electronic product codes for item identification.

Arizona Senator John McCain will soon step down as Senate Commerce Committee chairman. McCain must relinquish the position because Senate rules set six-year term limits for the coveted chairmanships. Although a new chairman won't be elected until the first week of January, it's expected that Sen. Ted Stevens of Alaska will take over the reins of the Commerce panel. Most Senate legislation affecting shippers, including transportation issues, must first pass through the Commerce Committee.

Motor carriers should get tax incentives to buy trucks with cleaner-burning engines. That idea was endorsed last month in a speech by American Trucking Associations (ATA) President Bill Graves. Starting in 2007, the Environmental Protection Agency (EPA) will require that all trucks be sold with new engines that emit lower levels of pollutants. "The cost of the new engines will be exponentially higher than today's engines," Graves said. The ATA chief added that his group remains concerned about the new engines' reliability and loss of fuel economy, but said ATA does not plan to challenge the EPA over the 2007 rule.

How are logistics managers faring on the salary front these days? A new survey from Mercer Human Resource Consulting found that cash compensation rose for top supply chain executives from an average $208,800 last year to $235,500 this year. Top logistics managers saw their pay climb from $160,800 in 2003 to $181,800 in 2004. Warehouse managers averaged $56,600 and transportation managers $73,500 in 2004. Mercer canvassed 1,170 mid-sized and large companies to collect compensation data. The Logistics and Supply Chain Module of Mercer's 2004 salary database can be purchased online at www.imercer.com or by calling 800-333-3070. (For details on how to participate in Logistics Management's own annual salary survey, see Page 3.)

Free trade rules fretting you? The United States has more than 10 free trade agreements in place or finalized, and another eight are under negotiation. But many U.S. importers and exporters aren't taking full advantage of the benefits those agreements have to offer. A new book authored by international trade expert Frank Reynolds, though, offers help. Free Trade Agreements for Americans, published by International Projects Inc., provides a practical guide for shippers on how these trade pacts work. Single copies are $40, and additional copies are available for $28 each. For more information or to order, call International Projects at 419-865-6201 or e-mail Reynolds at fjr424@aol.com.