An executive summary of industry news

Staff -- Logistics Management, 4/1/2001

Deutsche Post World Net (DP) will have to change its structure under the terms of a European Commission ruling issued late last month. In response to a suit brought by United Parcel Service (UPS) in 1994, which charged that DP was using revenues from its postal monopoly to unfairly subsidize its parcel-express business, the commission ruled that DP must create a separate parcels division. That division would have to purchase services at market rates from the parent company to prevent the postal arm from subsidizing express services. The commission also fined DP more than $21 million for offering loyalty contracts to mail-order customers, a practice that was designed to keep smaller competitors out of the market.
Collaborative relationships in a changing economy are the focus of the Council of Logistics Management's annual conference this year. The meeting, which annually draws an attendance of about 6,000 logistics professionals, will take place in Kansas City, Mo., from Sept. 30 to Oct. 3. Registration begins next month. For more information, visit the council's Web site at www.clm1.org.
Cuts in the Army Corps of Engineers budget have drawn protests from U.S. ports. The initial budget proposed by the Bush administration would reduce the corps' civil works budget to $3.90 billion from this year's $4.54 billion, says the American Association of Port Authorities (AAPA). The group, which represents ports throughout the Western Hemisphere, charges that the proposed level of funding is far short of what's needed for waterways infrastructure improvements. AAPA is urging the White House to increase the budget to $6 billion.
Anti-competitive practices in maritime transport have a greater effect on costs than do restrictive trade policies, concludes a report prepared for the World Bank. "Trade liberalization and the breakup of private carrier agreements would lead to an average reduction of liner transport prices by one-third and to cost savings of up to $3 billion on goods carried to the United States alone," say the authors. They call for liberalization of trade policies and for stronger sanctions against anti-competitive business practices to be included in the current round of World Trade Organization negotiations. The conclusions are those of the report's authors and do not represent the official position of the World Bank.
More big news from the world of international mail: The postal services of the Netherlands (TNT Post Group), Great Britain, and Singapore will establish a joint venture to handle cross-border mail. The new company, which will have its headquarters in Belgium, will be 51-percent owned by TPG. The British Post Office and Singapore Post will each have a 24.5-percent interest. The alliance will provide direct marketers, e-commerce merchants, publishers, corporate mailers, and financial institutions with more flexible, information-driven services worldwide, said postal executives in announcing the deal.
The Federal Aviation Administration (FAA) is under fire again. Last month, several members of Congress criticized the FAA for continuing delays in modernizing the nation's air-traffic control system. "The project is grossly behind schedule and over budget," said Rep. John Mica (R-Fla.) during a House Aviation Subcommittee hearing. Mica, the new subcommittee chairman, promised that he would hold additional hearings until the agency completed its planned hardware- and software-replacement program, which it is developing with the U.S. Department of Defense. Mica outlined the history of the project at the hearing, citing studies by the General Accounting Office that found mismanagement, cost overruns, and billions of dollars in wasted expenditures.
The International Brotherhood of Teamsters says it will gain between 2,000 and 4,000 new jobs over the next two years under a new agreement with Airborne Express. Twenty-one local unions approved a two-year contract covered by the National Master Freight Agreement that will have union members driving trucks for Airborne's growing "Airborne@home" and ground-delivery businesses. Airborne currently employs 9,000 Teamsters as pilots and drivers.
Trying to sort out who's who in e-commerce fulfillment? An updated directory published by Armstrong & Associates may help. The second edition of Who's Who in e-Commerce Fulfillment includes information about 102 companies that offer business-to-business and business-to-consumer services in the fulfillment and logistics areas. These include both well-known names in the logistics field as well as many new service providers that specialize in fulfillment for online retailers. Profiles include case studies, service capabilities, current customers, key personnel, and software details. The print version of the guidebook is available for $225; readers can obtain both the print and a diskette version for $595. Contact Armstrong & Associates by telephone at (800) 525-3915 or visit www.3PLogistics.com.
Reducing and preventing cargo claims is a high priority for the household-goods industry. And UniGroup, the parent of United Van Lines and Mayflower Transit, has launched a campaign to do just that. Last year, a task force composed of employees from such diverse areas as safety, claims processing, operations, and marketing developed recommendations for reducing the incidence of loss and damage. Among the suggestions that were adopted by the company were monthly mailings to agents that included videotapes, audiotapes, and written training materials about ways to prevent damage. The company expects that the initiative will result in a substantial reduction in claims incidents and costs.
Given that cross-border trade amounts to a billion dollars a day, the United States and Canada are each other's largest trading partners. That alone makes the semi-annual policy conference of the Can/Am Border Trade Alliance worth some attention. At the meeting in Ottawa from May 6–8, speakers from U.S. and Canadian government agencies, shippers, carriers, and customs brokers will offer the latest news on developments affecting U.S.-Canada trade, legislation, and border operations. A highlight will be Canadian Transport Minister David Collenette's speech outlining his newly proposed national transportation policy. For more information, call (716) 754-8824 or send an e-mail message to canambta@aol.com.
Keep on trucking … and trucking … and trucking. The newest edition of the Department of Transportation's Bureau of Transportation StatisticsPocket Guide to Transportationshows that truck travel has increased by 225 percent over the last 29 years in miles traveled. By way of contrast, passenger car mileage has grown by 71 percent. To order free copies of the guide, visit www.bts.gov, call (202) 366-DATA (press 1), fax (202) 366-3640, or write to Product Orders, Bureau of Transportation Statistics, U.S. Department of Transportation, Room 3430, 400 Seventh St. S.W., Washington, DC 20590.
A sign of the economic times: Intermodal traffic on major railroads was down by 2.3 percent for the first 10 weeks of the year compared with last year, and carload traffic was also off by 2.3 percent, according to the Association of American Railroads. The major decline was in trailer traffic, which was 10.6 percent below year-ago levels. On a brighter note, container traffic was up by 1.8 percent.