The Week

The Week

Copyright 2004, Traffic World, Inc.

Quote of the week: "Although we''d like to answer that question precisely, there are just too many variables to do that." -- Union Pacific Railroad Chairman and CEO Dick Davidson on when service will return to normal.

It''s still not being called a "meltdown" but Union Pacific Railroad Chairman and CEO Dick Davidson acknowledges that intermodal congestion and delays on the West Coast and in Houston are affecting other parts of its network. How soon will UP be back to normal? Davidson said there''s no way to tell. Smith Barney analyst Scott Flower is less skittish. "We anticipate it will be several quarters before we see a sharp gain or improvements in network operations," he said.

Rail security and positive train control will remain at the top of the Federal Railroad Administration''s list of priorities after current FRA Administrator Allan Rutter leaves in mid-June. Railroad safety improved markedly during his watch. Rutter is being replaced at least temporarily by FRA Deputy Administrator Betty Monro. A spokesperson said he expected "no change in the direction the agency has been moving" once Monro takes over.

State and local taxes on shippers'' inventories may be going the way of the dinosaur, say tax experts. Only 15 or fewer states levy inventory taxes today and that number is expected to drop as states compete for logistics investment and job creation. There''s broad agreement that inventory taxes are unpopular, hard to enforce and a leftover from the 19th century - but they make states money. Shippers and warehouse operators claim they are unfair and are working to end them.

Project cargo bound for remote sites around the globe must be delivered on deadline with each piece accounted for in the right box, a task complicated by a growing trend toward sourcing materials overseas. Shippers are demanding more and better management of project cargo from forwarders. "If there is a six-week lead time you can imagine the problems if something turned up missing," said Northrup Grumman manager Dan Hedges.

What''s good for Roadway Express isn''t necessary good for its customers. Roadway''s first quarter financials show it''s "back on track," says Bear Stearns analyst Edward Wolfe, and that means an even tougher rate environment for LTL shippers in an already tough market. Although the timing and amounts may vary, analysts expect Yellow Transportation and Roadway to take midsummer general rate increases of between 5 and 6 percent.

Early truck fatality data indicates that the number of truck-involved deaths increased almost 1 percent in 2003 but stayed below the 5,000 level for the second year in a row. Still, truck crashes kill about 95 people every week in this country. ATA President Bill Graves said the preliminary National Highway Traffic Safety Administration figures underscore the need for all highway users to "keep working together to help save lives."

Concurrent labor negotiations at FedEx and UPS may ease shipper concerns by making a strike by either company''s pilots less likely, a labor expert suggests. Facing a strike while its competitor settles with its pilots would be FedEx''s "worst nightmare," said Gary Chaison, professor of labor relations at Clark University in Massachusetts. FedEx pilots seek changes to work rules, scheduling and pay, but labor and management say there will be less acrimony in these negotiations than there was the last time.

Like Howard Beale in the 1976 movie Network, California drayage operators are "mad as hell" and aren''t "going to take this anymore." Their pique is from high fuel prices and steamship lines that negotiate directly with customers and set rates that prevent owner-operators from assessing surcharges to protect themselves from the rising costs. The California Trucking Associations sympathizes but wants them to channel their anger into an effort to win collective ratemaking authority.

Not satisfied with expanding up the Yangtze River, Shanghai International Port is looking for investment opportunities overseas. "We are the only (port) in China with international in the name," said Huang Xin, vice president of the world''s third-busiest container port. "Our strategy is to grow into a global company," Huang said. It''s still state owned, but the new mandate for Shangai is to operate as a Western-style business as it seeks more capacity.