A.M. Executive Briefing - Sept. 8
This Morning's Headlines:
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No. 2 Executive At UPS Plans to Retire, Making Way for New Generation at the Top
United Parcel Service of America Vice Chairman and Director John W. Alden, 57, will retire in early 2000, not long after the company intends to make a 10 percent IPO, the company said in a letter to shareholders. The letter also says that much of Alden's strategy-setting duty will be taken up by new Executive Vice President Michael L. Eskew, voted to that position from his former title of senior vice president of engineering.The 49-year-old Eskew will report to Chairman James P. Kelly and will continue to head up the company's infrastructure for e-commerce and technology. Eskew, air-operations chief and Senior Vice President Thomas H. Weidemeyer, Senior Vice President of Marketing Joseph M. Pyne, and Senior Vice President and COO Charles L. Schaffer are seen as the chief candidates to be head executive after the IPO.
ONTARIO TRUCKING ASSOCIATION: Absolute Liability Offence For Truck Wheel Separations Struck Down
A court in Sudbury, Ontario, has held that a liability charge against a school-bus firm violates the Charter of Rights and Freedoms, even though it follows a 1997 provincial law that mandates the guilt of a motor carrier when a wheel comes off one of its vehicles.Ontario Trucking Association President David Bradley, supporting the court decision, says the government cannot "deem someone to be guilty of an offense whether they were fault or not. Nor can you deprive someone of their right to launch a due diligence defense."
While the association thinks strong punishments against companies that did not perform wheel inspections were fair, it says it is sometimes tough to determine the reason for a wheel separation. The 1997 law was to give fines not to exceed C$50,000 without allowing the carrier to mount a defense or file an appeal.
However, Bradley says that despite the law, the government would still look for due diligence before charging a carrier, and he expects that to continue. The Sudbury court decision could still be appealed. M2 Presswire (09/07/99)
Rail-Freight Center Talks Getting Back on Track
The Michigan government's discussions with railroads regarding a truck-rail intermodal yard at the Junction Yard in Detroit are becoming more intensive since the breakup of Conrail, which owned the yard.The state and city transportation departments are trying to buy or lease the yard to allow shippers to save money with rail transport. In addition to trying to get part of all of the yard from CSX and Norfolk Southern, which split Conrail's assets and still use the yard, would-be intermodal developers still have to think about such issues as track rights, terminals,and funding.
In 1993, the state transportation department found that Detroit's railyards could not handle much more freight. The finding reveals that some Detroit cargo is taken by truck to railyards in Chicago.
"There's a lot of finished product produced in Southeast Michigan and a lot of warehousing, but it's spread all over the place," says Southeast Michigan Council of Governments transportation-programs director Carmine Palombo. He puts the cost of a Junction Yard intermodal facility at $200 million.
City transportation department director Al Martin says the Transportation Equity Act for the 21st Century earmarks $18 million for the project. Area planners and businesses want Detroit to handle more freight with less truck volume.
Wayne State University transportation and logistics professor John Taylor says some freight coming from ports in Montreal and Toronto might be diverted to Detroit from Chicago. A Canadian National Railway Co./Illinois Central spokesman says the railroad is observing the Junction Yard activity but is not yet ready to decide whether to participate. Crain's Detroit Business (08/30/99-09/05/99) Vol. 15, No. 35; P. 3; Kosdrosky, Terry
UPS Says Tax Hit Won't Hurt Mailers
United Parcel Service says the charges it has taken against second-quarter earnings "will not have any foreseeable impact on our rates," says spokesman Ken Sternad. The company posted an $854 million loss in the quarter due to the charges. But it has said to the Securities and Exchange Commission that it has adequate cash to pay the possible $1.67 billion liability to the Internal Revenue Service. Direct (09/15/99) Vol. 11, No. 12; P. 11People: Meritor Automotive, AEI, Tantara Transportation Group
Meritor Automotive has named internal communications and governmental affairs Senior Director Jerry Rush to the post of senior director of public affairs. Meritor has also named Lin Cummins as vice president of communications. Cummins was the vice president of advanced marketing and worldwide communications for United Technologies Automotive.AEI has named Christina Soutar as manager of automotive logistics. Soutar was logistics manager for GM Logistics Support Co.
Tantara Transportation Group has named sales and operations director Scott Stolz to the post of vice president/general manager. Tantara has also named Joe Chioda as director of operations; he previously was director of special products for Federal-Allied Van Lines. Crain's Detroit Business (08/30/99-09/05/99) Vol. 15, No. 35; P. 37
NAFTA Shipping Still Negotiating the Curves
Although trade among the Nafta countries has hit $1 trillion a year, politics has muddied the effects of the pact. The Clinton administration has proposed a tax on trucks moving between the United States and Canada, revenue from which would be allocated toward Customs computer upgrades. This would allow the computers to handle the trade flow from Canada, but it violates Nafta terms.While a 1999 U.S. restriction confines most Mexican trucks in the United States to a strip 12 to 20 miles wide at the border, the U.S. Transportation Department has found illegal Mexican carriers far from the southern border. Poor safety among Mexican trucks has led many U.S. legislators to ask President Clinton not to open the border on Jan. 1.
Certain carriers are undaunted by such Nafta implementation problems. The LTL carrier Roadway has established a "Border Ambassador Service," which monitors Roadway border crossings and notifies customers of problems. Working with the Census Bureau, the Commerce Department, and Laredo Freight Forwarding Association, Roadway has put together an electronic shipper export declaration system.
Kansas City Southern Railway, which for some years has been running Transportacion Ferroviara Mexicana in partnership with a Mexican firm, has said it will spend around $70 million to turn a Kansas City-area airport into a hub for international intermodal service. The airport is near I-35, which outstrips all other interstates in handling freight between Nafta countries. As a result, it is the subject of three proposals for upgrades, including new truck lanes.
Canada-based H&R Transport is taking over a Salt Lake City refrigerated line. Finally, Canadian National Railway has acquired Illinois Central Railroad and partnered with Kansas City Southern. World Trade (09/99) Vol. 12, No. 9; P. 54; White, Michael D.
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