Management Update

An executive summary of industry news

By Staff -- Logistics Management, 10/1/2005

Almost on cue, the Teamsters (IBT) and Public Citizen jointly filed a challenge to the most recent version of the hours-of-service (HOS) rules with the Federal Motor Carrier Safety Administration (FMCSA) on Sept. 23. According to John Larkin, managing director of analysts Legg Mason's transportation research group, the coalition is determined to keep the pressure on the agency. "It's safe to conclude that the ongoing HOS rules saga is not over yet and that more capacity will be removed from the industry while the court challenges are heard," Larkin said. Meanwhile, in his address to NASSTRAC's fall meeting in Baltimore, the FMCSA's John Steinhoff told attendees that the Bush administration's latest tweaking of the hours-of-service rules is not intended to "regulate for regulation's sake" but to modernize the regulations to accommodate the latest in trucking technology. Steinhoff assured attendees that the administration was confident that its latest rewrite would withstand additional court challenges. "Are the latest rules based on sound science? You betcha," he said.
Diesel prices should hold steady at $2.50 to $2.70 through the winter.According to Logistics Management's in-house economist, Jim Haughey, U.S. business is compensating for most of the oil-supply loss caused by hurricanes Katrina and Rita by drawing on inventories and emergency supplies. While this will hold diesel prices down in September and October, the flip side of that strategy is that the oil industry will have to replace those inventories in an extremely tight market to keep a minimum reserve available for winter. This will keep diesel prices in the $2.50 to $2.70 range at least until spring, says Haughey. In his column in our Pricing Trends e-newsletter, he notes that the hurricanes caused the postponement by several months of an expected drop in crude oil prices from $65 per barrel to a more sustainable price in the high $40s. To keep on top of this and other economic news, sign up to receive Pricing Trends at www.logisticsmgmt.com.
U.S. Customs Commissioner Robert C. Bonner plans to retire soon. Bonner notified President Bush late last month of his desire to step down, but an official retirement date has not yet been set. Speaking at a recent conference on supply chain security sponsored by the Massachusetts Institute of Technology's Center for Transportation and Logistics, Bonner recalled that his first day on the job was Sept. 10, 2001. The next morning, he was forced to make his first sweeping executive decision—close all U.S. airports after hijacked planes hit the Pentagon, the Twin Towers in New York, and crashed into a field in Pennsylvania. In his time as commissioner, Bonner has championed a business-government partnership approach to trade security. When asked if this collaborative approach would continue after his departure from office, Bonner indicated that it would. "The processes are already put in place, are becoming institutionalized, and they are working well," he said.
You want more news? You've got it. Logistics Management is about to help quench your insatiable thirst for logistics and transportation regulation news. This month we're launching the newest addition to our e-newsletter stable, LM's Wednesday Edition, a summary of the week in logistics, transportation, and regulation. Every Wednesday afternoon we'll blast news from LM's editors and the very latest stories hot off the wires from around the corner and around the world. We've also teamed up with the National Industrial Transportation League (NITL) to give shippers a peek at the latest developments inside the Beltway. To subscribe, go to www.logisticsmgmt.com and click on "Free e-Newsletter Subscription." You'll be glad you did.
Port security funding falls short. Congressional leaders announced that the Fiscal Year 2006 Department of Homeland Security (DHS) budget would provide $175 million for the next round of Port Security Grant (PSG) funding. But according to Kurt Nagle, president of the American Association of Port Authorities (AAPA), that number is far from adequate. "To help protect ports against crime and terrorism, AAPA has called for a funding level of $400 million a year to harden security at all seaports that need to comply with the Maritime Transportation Security Act (MTSA)," Nagle remarked. That $400 million, he said, is what the U.S. Coast Guard believes is necessary for America's seaports to comply with the MTSA. "But so far, ports have had to pay for much of their own security infrastructure and improvements," Nagle continued. "This could cause ports to experience funding shortfalls for critical operating infrastructure, such as new cranes, dock upgrades, and cargo handling equipment."
Intermec and Symbol finally reach a truce. After many months of wrestling over an intellectual property dispute involving radio frequency identification (RFID), the two companies have put legal actions on hold. Under the terms of their agreement, Symbol Technologies has joined Intermec's Rapid Start RFID intellectual property licensing program, which provides Symbol with access to a number of Intermec's RFID patent portfolios, including RFID tags and fixed and portable readers. Symbol is also exercising the cross-licensing provisions of the Rapid Start program. Intermec will file for dismissal of its lawsuit in a Delaware district court.
Putting safety first. The American Trucking Associations (ATA) has named three motor carriers as winners of its 2005 National Truck Safety Contest. The companies—representing large, mid-sized, and small fleets—are Con-Way Western Express, A. Duie Pyle Companies, and Ace Doran Hauling & Rigging Co. The ATA says the three winning companies, judged to have the best overall safety programs and records of safety initiatives among the contest entries, will be presented with the association's President's Trophy during the ATA's Management Conference and Exhibition in Boston later this month.
Itching to sound off on the Staggers Act? Surface Transportation Board (STB) Chairman Roger Nober will hold a public hearing marking the 25th anniversary of the Staggers Act of 1980. The act allowed the railroad industry the flexibility to adjust rates and tailor services to meet shippers' needs and reformed restrictive labor practices. The STB is encouraging shippers, railroads, representatives of local communities, and state and federal governmental officials to attend the hearing and express their views on the impact of the Staggers Act. The hearing will begin at 10 a.m. on Wed., Oct. 19, 2005, at the agency's headquarters at 1925 K St., N.W., Washington, D.C. For more information, go to http://www.stb.dot.gov.
Three events originally planned for New Orleans have been relocated.The Association for Operations Management (APICS) 2005 International Conference and Exposition has moved to Kansas City, Mo., for Oct. 16–18 (www.apics.org). The Dangerous Goods Advisory Council's 27th Annual Conference and Exposition will be held in Atlanta on the originally planned dates Nov. 9–11 (www.dgac.org). And Informa announced a change of venue for this year's Terminal Operators Conference and Exhibition for the Americas (TOC2005 Americas). That event will now take place in Savannah, Ga., Nov. 29–Dec. 1 (www.toc-events.com).
CSCMP is naming names in its newest publication, Supply Chain and Logistics Consultants Directory. The Council of Supply Chain Management Professionals (CSCMP) developed the directory to help supply chain management and logistics professionals select the right consultants to meet their business needs. The 92-page publication can be ordered at CSCMP's online bookstore at www.cscmp.org. The cost is $39.95 for CSCMP members and $79.95 for nonmembers.