The Week

The Week

Copyright 2003, Traffic World, Inc.

Quote of the week: "(I)t has become an expensive, anachronistic exercise serving little purpose." -- Transportation attorney Ed Greenberg on why nonvessel owning common carriers should be exempted from tariff requirements.

Following United Parcel Service''s lead, the National Customs Brokers and Forwarders Association of America petitioned the Federal Maritime Commission to allow nonvessel operating common carriers to negotiate contracts with shippers. The NCBFAA seeks the same negotiating freedoms that shipping lines have had since the Ocean Shipping Reform Act of 1998 became law. "It''s now a burdensome regulatory structure which really only operates to create competition problems for NVOCCs, make them less efficient, make them less competitive by increasing costs," said NCBFAA transportation attorney Ed Greenberg.

Ronnie A. Yoder, the Department of Transportation''s chief administrative law judge, removed himself from the case examining the corporate citizenship of AStar Air Cargo. Yoder''s Aug. 13 resignation came two days after AStar attorneys requested the judge be removed from the case, challenging his impartiality. Yoder announced his decision at the third prehearing conference in the case, saying he resigned "in spite of, not because of," AStar''s motions, and reassigned the case to Burton S. Kolko, DOT''s only other administrative law judge.

The SARS epidemic, poor infrastructure and inscrutable trading practices are all reasons for being cautious about doing business in China. But the dragon is still fired by a fierce entrepreneurial spirit and continues to drive forward. Two examples of commercial life in China in the latest issue of Knowledge@Wharton, published by the University of Pennsylvania''s Wharton School, highlight the challenges and the way China is overcoming them. One enterprise has prospered under the old and new systems, while the other has found a market in China''s emerging capitalist economy.

After three years of holding their breath, companies are hopeful that an economic upturn is finally in sight. The slog through recession has made logistics services providers leaner and more selective about the work they take on but the post-recession market will bring new challenges. A slew of second-quarter 2003 results attest to the uncertain business climate in the first half of this year. A number of players including Bax Global, Menlo Worldwide, Kuehne & Nagel and Ryder System Inc. reported declines in logistics business and difficult market conditions. A few bucked the trend: C H Robinson Worldwide posted a second-quarter gross profit increase of 11.9 percent and a 12.7 percent increase in total transportation gross profits for the same period.

What is similar to an x-ray but not an x-ray? The answer is pulsed fast neutron analysis, probably something you''ve never heard of before. The technology is being tested at the Ysleta border crossing near El Paso, Texas, to improve truck and cargo security. The program is jointly funded through the U.S. Department of Defense, the Bureau of Customs and Border Protection and the Transportation Safety Administration, said DOD spokesperson Stacia Courtney. Ancore Corp., a subsidiary of OSI Systems, developed the technology.

Officials at USF Corp. are hoping to name a successor to Samuel K. Skinner as their new CEO by September. They are hoping to attract someone to stay at the Chicago-based group of regional LTL carriers for a long-term commitment. Meanwhile, USF reported a slight dip in second-quarter income as its Red Star unit in the Northeast posted its 10th straight losing quarter. Red Star has lost its largest customer, Home Depot, but said that $30 million in annual freight was producing low yields. Red Star also has closed an Atlanta terminal and one in New England while cutting its geographic coverage in hopes of regaining profitability.

Major U.S. airlines continued skywriting in red during the second quarter of 2003. America West did join Southwest Airlines in turning a profit, excluding special charges and one-time items, for the quarter. But those airlines'' bigger brethren still are waiting to turn the corner. The airlines'' cargo units again performed better than the overall companies. Cargo results were varied, partly due to the different measures airlines use to gauge their cargo divisions.

The National Industrial Transportation League and Kansas City Southern recently came to terms on KCS''s NAFTA Rail petition at the Surface Transportation Board, whereby the League agreed to support the transaction in exchange for the implementation of certain operating conditions by KCS with its customers. It''s the first time such a deal was agreed upon under the auspices of the League''s Vision 2020 initiative, an initiative that NITL says was an important part of the process and one which it expects will be key to addressing future rail infrastructure issues.

After years of sailing against the wind, transatlantic carriers are enjoying fair seas. Steady volume and tighter capacity is enabling ship lines to make rate increases stick. Carriers began trimming capacity last year and have avoided adding new capacity despite a modest increase in volume. "Shippers are scrambling around to get capacity," said David Newman, an equity analyst who follows the transatlantic ocean transport sector for National Bank Financial of Toronto. "It''s a carriers'' market."