The Week

The Week

Copyright 2004, Traffic World, Inc.

Quote of the week: "What is smart for a railroader doesn''t get it done in trucking." -- Donald Broughton, trucking analyst for A.G. Edwards & Sons, St. Louis, on why the Union Pacific-Overnite combination didn''t last.

The 1980s was the era of big hair, loud guitars and big intermodal transportation mergers. Loud guitars still are popular, but transportation conglomerates are not. Overnite''s divorce from Union Pacific is just the latest divestiture. Basically, the lesson seems to be that transportation mergers can work if the parent company is accustomed to a high level of service and drops down a notch in its acquisition - an air freight company buying a trucker, for instance. Otherwise, the partners are asking for trouble.

Railroads and shipping lines that own container chassis will be liable if their equipment doesn''t meet Department of Transportation safety standards. DOT will launch an inspection program that puts responsibility for intermodal chassis safety squarely on the shoulders of chassis owners - not truckers who move the chassis.

Congress likely will pass a stop-gap measure to keep highway programs running while searching for funding for a new highway bill, a senior Senate staffer says. Where the money will come from and who''s going to pay for it are the obstacles to a six-year highway reauthorization bill, said Debbie Hersman, senior Democratic staffer for the Senate Commerce, Science and Transportation Committee. Hersman is being considered for a post at the National Transportation Safety Board.

Shippers participating in a major study of supply-chain best practices in retailing have compared notes on what works and does not work. While their experiences differ one common message came through loud and clear: shippers want more control over inbound freight partly because supply-chain visibility is still a problem.

China is making the Year of the Monkey the Year of Technology: its government recently launched the National RFID Tag Standards Working Group, in charge of developing radio frequency identification standards for use in the country. As one of the biggest manufacturing centers in the world, China''s decisions will have dramatic consequences, sending shivers up the supply chain all the way to Wal-Mart.

Radio Frequency Identification technology may not be the most recent or radical development, but it''s time has come. As major retailers in North America and Europe demand suppliers comply with RFID directives, thousands of manufacturers, exporters, importers and transportation companies are struggling with the technical challenges of implementing the technology - and finding a way to pay for it.

The first three major truckload carriers to report full-year and fourth-quarter earnings posted bang-up numbers. Werner Enterprises, the nation''s fifth-largest truckload carrier, and smaller carriers Heartland Express and Knight Transportation, all wowed analysts with healthy gains. But the truckload boom may mean higher rates for shippers.

What does "A+B" equal? Lower rates, shippers moving freight with Canadian National Railway and CSX hope. The railroads are the first to roll out an Internet-based pricing plan, dubbed "A+B Pricing," that they hope will make the railroads as easy to use as trucks. The program will let shippers get rates for interline carload shipments online.

Most American combination carriers reported heavy losses last year, with cargo revenue largely flat as the airlines failed to see much of the recovery coursing through the rest of the economy. Only Southwest Airlines got significant lift from cargo, with the smaller carrier''s cargo revenue increasing 10.6 percent in 2003.

Pirates killed 21 mariners and attacked 469 ships last year, one of the bloodiest years in the past decade on the high seas. Growing "political" piracy may be linked to international terrorism. The International Maritime Bureau wants governments to take action, prosecuting more pirates and handing down tougher, longer sentences. It gives points to Malaysia for cracking down on piracy in its waters.