The Week

The Week

Copyright 2003, Traffic World, Inc.

Quote of the week: "The Lord will take care of us one way or another." - House Transportation Committee Chairman Don Young on how to fund the $375 billion House highway bill.

The federal government spelled out its final rules for advance notification of import and export shipments by land, sea, air and rail, raising new questions for shippers and carriers about how to meet the demands and who gets to pay the cost. And although they take effect this week, Customs and Border Protection Commissioner Robert C. Bonner couldn''t say when enforcement will begin.

A missile strike against a DHL cargo plane in Iraq raised new fears across the airline industry of vulnerability to terrorism. Some lawmakers said the attack, which neither DHL nor the Pentagon would confirm came from a missile, shows why planes should be outfitted with missile-defense technology. In the meantime, civilian flights into Baghdad were suspended, making the work of relief agencies harder. DHL was flying six flights a day into Baghdad.

House Transportation Committee Chairman Don Young, R-Alaska, and ranking Democrat James Oberstar, D-Minn., are pushing a $375 billion, six-year highway reauthorization bill. The bill pleases the transportation industry, which would benefit from its largesse. But Young has no plan on how to pay for the legislation.

The National Industrial Transportation League named two carrier executives to its board of directors last week, breaking new ground in attempts to align the interests of shippers and freight operators in Washington. The appointments of Art Lynch, vice president of sales at LTL giant ABF Freight Systems, and Rich Webb, president and CEO of the Watco Cos. rail operation, give the nation''s largest shipper group its first board members from the carrier side of the business.

Ten Central and Eastern European countries will become new members of the European Union in May 2004, expanding the EU''s territory by 23 percent and adding $368 billion to its gross domestic product. But before logistics services companies jump into this giant market to take advantage of new business opportunities, they should take a close look at what it takes to succeed in this complex jigsaw puzzle of countries.

New regulations soon will go into effect requiring trucking companies to electronically submit information on all imports and exports, even though the Bureau of Customs and Border Protection cannot electronically accept that information. The system Customs needs to do so, for all intents and purposes, does not yet exist. Under these new rules shippers and carriers must send shipment information electronically to Customs'' Automated Commercial Environment system. But ACE isn''t the system checking the shipments - that''s the job of the Automated Targeting System, which hasn''t been as widely publicized.

The Central States Pension and Health and Welfare Fund trustees are making drastic cuts that Teamsters dissidents say will hurt retirees by curtailing benefits under the union''s popular "30-and-out" early-retirement provision. The Teamsters for a Democratic Union claims the fund is trying to keep people working to avoid paying them pensions. The cuts were announced Nov 19 at a meeting of union officials in Chicago that some participants said was raucous.

Less than two weeks after it announced a 2 percent insurance surcharge on all shipments effective Jan. 1, Con-Way Transportation Services rescinded the fee because of shipper backlash. No competitor joined in the surcharge and Con-Way officials admitted that some aggressively used it against Con-Way in the marketplace. Con-Way will review its employee benefit costs, which have risen $101 million since 1999, and fold those costs into its annual late-summer general rate increase.

CSX is banking on substantial improvements in 2004 to its operations and service after years of operational inefficiencies. In the third quarter CSX posted a third-quarter per-share loss of 48 cents. Excluding after-tax charges, earnings per share for the third quarter were 51 cents on net earnings of $109 million versus $127 million or 60 cents a share a year ago. For the fourth quarter and beyond, CSX sees management changes and a tighter grip on operational controls boosting productivity and improving service.

Ground shippers got an early Christmas present from UPS: its lowest rate increase in seven years. Brown will increase its domestic ground rates an average of 1.9 percent on Jan. 5, compared with the 3.9 percent hike last year, its highest ground increase since the mid-1990s. Air rates will increase more with an average domestic jump of 2.9 percent. The difference in rate increases reflects tightening competition on the ground, where UPS has the largest market share.

The defeat of a controversial plan to ease regulatory constraints on European port operators left EU ports in a regulatory and legal quagmire. While other industries have been reshaped under liberalized laws and regulations, EU ports and terminals have stood aloof from major change. The European Parliament voted 229 to 209 against a directive that proponents said would have encouraged competition and reduced costs in ports but which opponents said would have undermined unions and endangered workers.