Management Update

An executive summary of industry news

By Staff -- Logistics Management, 9/1/2005

• The fuel crisis has prompted truckers to launch a campaign for Congressional action. The American Trucking Associations (ATA) has initiated the National Fuel Price Crisis Watch, a campaign to "put a face on the problem" that the rapid rise in diesel prices is creating for both motor carriers and the economy at large. The ATA is asking members to tell how higher fuel prices are affecting their businesses; the group plans to present those stories to Congress and the media. For details, visit www.truckline.com/fuelpricecrisis. The site also contains current information on the fuel situation and a list of diesel prices across the country.
• The Teamsters have come out swinging against the revised HOS rules. The union believes that the recently modified hours-of- service (HOS) regulations for truck drivers will increase the potential for deadly accidents by forcing drivers to spend more hours on the road than they do now. Two years ago, the Bush administration revised the HOS rules, which set the amount of time truck drivers can spend behind the wheel. A court challenge by safety advocates prompted the federal government to make minor modifications to the rules. The Teamsters' strong opposition increases the likelihood that the issue will head back to court. For more details, turn to the News & Analysis story on Page 18.
• Expect to see a new type of security seal on inspected containers. U.S. Customs and Border Protection (CBP) began using bolt-type seals early last month. After a container undergoes a physical inspection, Customs officers will apply the seals, which are compliant with the International Organization for Standardization Publicly Available Specification 17712. Each of the new seals bears a unique serial number. The agency said in a notice to the trade that it has adopted the new seals to ensure integrity of containerized cargo leaving its possession and to standardize the type of seal CBP officers are authorized to use.
• shippers will have another option for routing their Asian imports.Three railroads are working together to provide an intermodal service that connects the Mexican port of Lázaro Cardenas and Kansas City. The Kansas City Southern Railway, Transportación Ferroviaria Mexicana (TFM), and The Texas Mexican Railway Co. have created a 1,300-mile ship-to-rail corridor stretching from Mexico's Pacific seaports to the American hinterland. The new service was made possible by Kansas City Southern's recent purchase of TFM. Kansas City SmartPort, a group promoting Kansas City as an international shipping hub, is touting the LC-KC Corridor as an alternative to the congested Southern California-Chicago route. KC SmartPort also has asked the Mexican government to establish a Mexican Customs office in Kansas City.
• West Coast port congestion has pushed one ocean carrier eastward.Tokyo-based logistics and ocean transportation company Mitsui O.S.K Lines (MOL) said it plans to operate the first direct container service between Jacksonville, Fla., and Asia. MOL cited congestion and price inefficiencies at California ports as the main reasons for its decision to set up shop in Jacksonville. Port officials there said the $200 million terminal facility MOL is building will make Jacksonville one of the largest container ports on the U.S. East Coast.
• A new book delves into how RFID will change supply chains. The Council of Supply Chain Management Professionals (CSCMP) has published Breakthrough Connective Technology: How RFID and Other Applications are Revolutionizing the Supply Chain. The book was written by Pete Abell, a co-founder of the RFID consultancy ePC group, and Marshall Kay, a senior manager with the consulting firm Kurt Salmon Associates. In addition to detailing the history of RFID and examining the issue of return on investment for the technology, the book offers specific recommendations for determining the next steps in adopting RFID. The book goes for $19.95 for CSCMP members and $39.95 for non-members. Copies can be ordered through CSCMP's online bookstore at www.cscmp.org.
• If rural roads seem more crowded lately, you're not imagining things. According to the Federal Highway Administration, traffic on rural interstate highways increased 36 percent between 1992 and 2002, significantly higher than the 25-percent increase in traffic on urban interstates during that period. Traffic volume per lane increased 35 percent on rural interstates, compared with 21 percent on urban highways. In its report, "Traffic Congestion and Reliability: Linking Solutions to Problems," the federal agency said that the growing demand for truck transportation was a major factor in boosting rural highway congestion.
• What's the largest cold storage company in North America? The International Association of Refrigerated Warehouses (IARW) says that Atlas Cold Storage, with 219 million cubic feet of gross refrigerated space, holds first place among its member companies in North America. The next-largest provider of temperature-controlled warehousing is United States Cold Storage, with 128 million cubic feet of space, followed by P&O Cold Logistics, with 119 million cubic feet. The top 20 refrigerated public warehouses in North America currently offer more than 1.1 billion cubic feet of space, an increase of 4.5 percent over the previous year.
• Steamship lines should start looking over their shoulders at parcel carriers, according to IBM Business Consulting Services. In its report, "Setting a New Course in the Container Shipping Industry," IBM's researchers say that the greatest long-term threat for container shipping companies comes from package delivery providers like UPS, TNT, and DHL. IBM says it expects that a decade from now, such companies—some working in concert with ocean carriers—will begin targeting container shipping lines' customers.
• "Don't put all your eggs in the China basket." That warning comes from Julian Keeling, president of airfreight wholesaler Consolidators International. Speaking at the Trans-Pacific Air Cargo Conference, Keeling chastised the air cargo community for "being hypnotized by China." Although the growth of the Chinese economy has been remarkable, it "will not and cannot last," he said. There already are signs emanating from China of a slowdown in a number of industries, and governments around the world are poised to take protective measures against the mounting volume of Chinese imports," he noted.
• If North American trade is an important part of your business, consider attending the Border Trade Alliance's 2005 Conference and Trade Show, which will take place October 13 and 14 in San Antonio, Texas. The conference will look at the impact of the North American Free Trade Agreement (NAFTA) and the new Central American Free Trade Agreement (CAFTA) on international trade. Other topics on the agenda include guest-worker programs and the U.S.-Canada softwood lumber dispute. For more information, go to www.thebta.org or call 800-333-5523.
• Want to know more about the Masters of Logistics Survey featured in this issue?Then be sure to tune in for our live webcast on September 28th at 2 p.m. Dr. Karl Manrodt of Georgia Southern University and Dr. Mary Holcomb of the University of Tennessee will highlight key findings from their research, then answer questions from the online audience. For more details or to register, go to www.logisticsmgmt.com, click on "free e-newsletter registration," complete the registration form, then click on the webcast box. For a preview of the survey results, see "High-Wire Act" on Page 32.