The Week

The Week

Copyright 2004, Traffic World, Inc.

Quote of the week: "Shippers are feeling it. We are planning for a 15 percent impact." -- BP Solvay Polyethylene''s Michael Scherm on the new hours of service rules.

John Kerry helped win billions of dollars for major transportation projects in his home state, including the massive "Big Dig" project in Boston, and chaired a maritime-related subcommittee. Still, even after four Kerry terms in the Senate, there is little for shippers and transporters concerned about the possible transportation policies of a Kerry administration to review. Jane Garvey, the former head of the Federal Aviation Administration, is on everyone''s short list for a potential Kerry DOT chief.

A bill that would shunt about $18 billion to the highway trust fund may pave the way for a $275 billion, six-year highway bill. The House Ways and Means Committee proposed changes in the way ethanol is subsidized and a crackdown on fuel tax evasion. That $275 billion may not be enough to satisfy the House transportation leader Don Young, R-Alaska, or transportation interest groups, but it may be the most they can hope to win this year.

Federal highway regulators are looking at some "minor tweaks" to the trucking industry''s new hours of service rules but a flood of criticism from shippers suggests those on the loading docks want a full overhaul. Shippers at the National Industrial Transportation League''s annual legislative forum last week complained that they are being hit not only with higher rates and detention charges but also with many new operational questions.

The March 11 terror attacks in Madrid have Congress scrambling to find more security funding for U.S. railroads. Several Democratic senators introduced plans to funnel more than $3 billion to freight and passenger railroads over several years. Sen. John McCain, R-Ariz., promises to have a rail security bill ready by April. House lawmakers, meanwhile, want an investigation into what they see as problems with air cargo security.

Shippers take heart: consolidation in the software market today means better transportation tools tomorrow. Three recent acquisitions will give shippers greater insight into their supply chains without the need to install multiple software programs and integrate multiple systems - TransCore''s purchase of Vistar Telecommunications, Inoveris'' purchase of Saturn (Solutions) in Canada, and IBM''s acquisition of Trigo Technologies.

Despite the advance of cellular technology and the Internet, most truckload carriers still turn to satellite communications when they need to track freight or send information to drivers. Some are still using the same communications equipment they installed in truck cabs more 10 or more years ago.

Phoenix-based Swift Transportation, the nation''s largest public truckload carrier, is hitting some speed bumps. Buffeted by bad weather, rising fuel costs and driver issues with the new hours of service rules, the usually profitable truckload carrier is suffering a so-so March, traditionally the month when most large motor carriers make their first-quarter profit. Even with Swift''s March sadness, analysts say the broader truckload market is strong.

Mexican trucks can''t drive into the United States but they are in the Supreme Court. The question of Mexican-domiciled trucking in the U.S. hits the high court next month in oral arguments over whether Mexican truckers will unduly harm this country''s environment. At issue is whether environmental laws trump fine print in the North American Free Trade Agreement.

Higher fuel costs are pushing railroads carrying western coal toward pricing strategies that give shippers sticker shock. Union Pacific Railroad is bucking long-term trends with a new Powder River Basin coal pricing scheme that replaces individual contract rates with public tariff-style pricings. UP says the change is needed to generate adequate revenue; shippers say it will take away leverage crucial to negotiating fair rates.

All or nothing demands from EU negotiators could stall aviation talks between the European Union and the United States. The U.S. wants to phase in the dramatic changes in trans-Atlantic flights that Europeans are seeking, including cabotage and greater foreign ownership of U.S. airlines. The trouble for the American side is those points are matters of law they can''t change.

Shipping lines want to ease the pain meat exporters feel from overseas bans on U.S. beef and poultry. OOCL lowered its demurrage fees for refrigerated containers stranded in foreign ports, and some carriers are re-evaluating their deployment of refrigerated containers from Asia to the Southern Hemisphere, where this is the busy season for exports of fruits and vegetables. U.S. negotiators also have put rate increases on hold.