Copyright 2004, Traffic World, Inc.
Quote of the week: "Freight flows move faster than Washington does." -- Surface Transportation Board Chairman Roger Nober.
Ports across the country are looking to Washington for help with security-related costs and many say that what they are getting is direction without dollars. The U.S. Coast Guard has put a $1.1 billion price tag on port security and Congress so far has authorized less than half of that. Ports are pressing hard for $400 million they say is needed to comply with the 2002 Maritime Transportation Security Act by July 1.
Fear that terrorists could follow the March 11 attacks in Madrid with train bombings in the United States is spurring action on a $1.2 billion rail security bill. The bill, unanimously approved by a Senate committee, would require railroads to perform vulnerability assessments similar to those being conducted by ports and provide grants for railroads, states and local governments to improve passenger and freight rail security. Federal officials, however, say an aviation-related terrorist attack still is the greater threat.
There is nothing worse for a shipper than a "stock out," which is what happens when just-in-time supply chains slip and goods don''t arrive when they''re needed. As the economy heats up, shippers are moving inventory closer to end users, changing distribution and warehousing strategies. That''s changing the role real-estate and distribution center management companies such as ProLogis play in logistics.
The 46,000 shippers who supply the U.S. military with everything from paper clips to ammo clips have a difficult mission: to put data-rich RFID tags on every pallet, package and case they ship to the Department of Defense by January. But the DOD doesn''t have an RFID battle plan for shippers yet. The Pentagon is asking its suppliers to help plan its roll out of radio frequency identification technology.
Transportation executives say the highway bill is the wrong place for Washington to suddenly find fiscal religion. FedEx Freight President and CEO Douglas G. Duncan called the confrontation over the highway bill "an atrocious situation" that harms shippers and truckers. Duncan said he would rather Congress pass another short-term extension of the current highway spending law before it expires this month than an underfunded six-year highway bill.
It''s a good time to be a regional LTL carrier these days, and that''s why more truckers are expanding their regional scope. Acquisitions are part of the strategy and truckers say the winners are shippers who have more choices on moving goods within and between regions.
That competition that Norfolk Southern and CSX promised in the Conrail agreement isn''t so much competitive as cooperative, according to shippers. Companies using what the rails called "shared asset areas" say their prices remain high and the service limited, despite the assurances from competing railroads. The Surface Transportation Board is looking at the complaints.
Union Pacific Railroad insists it is working hard to fix its service problems but all indications are that the backups and failures are spreading. A Wall Street firm''s survey says shippers around the country are feeling the backups and UP reports show shipments are down at key points. The STB, meanwhile, says it is watching but not acting on the problem.
A government agency says U.S. express carriers face unfair competition around the world from postal monopolies. FedEx and UPS hope the report gives some backbone to American negotiators looking for new international air agreements. DHL says it hopes the same, but also hopes the competitors aren''t looking to turn the report on a competitor owned by the German post office.
The Port Authority of New York and New Jersey is spending big to get bigger. Nearly a quarter of the $1 billion in the port''s new capital budget targets improvements in intermodal infrastructure. The port wants to dig channels deeper, too, to bring in bigger ships to get more goods to those improved rail facilities.