News Briefs - Dec. 14
- FedEx, UPS Expect Lower Volumes on Peak Days
- United's Mechanics Vote to Strike
- FedEx Ground Lowers Fuel Charge
- Immigrant Pleads Guilty in Hazmat Case
- Customs Service Seeks to Search Outgoing Mail
- Oil Price Rises as Norway Ponders Cut
- Baggage Screening Plan Short on Funds
- Rail Intermodal Down 2.7% in 49th Week
- Big Three Automakers to Close Plants
- Transportation Technologies Files for Chapter 11
- Trailer Reflector Exemption Expires
- Small Business Survey Predicts 4Q Recovery
- U.S. Trailmobile Bankrupt, Canadian Affiliates Are Not
- United's Mechanics Vote to Strike
FedEx, UPS Expect Lower Volumes on Peak Days
FedEx and United Parcel Service are both predicting lower traffic volumes on its busiest shipping day of the holiday season, the Journal of Commerce reported.FedEx believes it will handle about 6 million packages on Dec. 19, compared with around 6.2 million on its busiest day last year.
UPS anticipates volume to be around 18 million packages on Dec. 18, JoC said, which will be this year's peak day. That compares with the 19 million packages it projected for the busiest day last year.
UPS spokeswoman Kristen Petrella attributed the drop in part to the calendar, which will allow for deliveries to still be made on Christmas Eve, unlike last year when it fell on a Sunday. As a result, UPS expects that shipments will be more spread out this year.
United's Mechanics Vote to Strike
Mechanics at United Airlines have voted to authorize a strike, Reuters reported Friday, in what is becoming the first major labor battle within the airline industry since the Sept. 11 terrorist attacks.An actual strike probably will not take place until at least mid-February because the White House has said it will step in to delay it for two months on the grounds it would be damaging to the economy.
A strike could delay some cargo shipments because airlines, including United, often transport cargo in the bellies of passenger planes. Trucks carry the air cargo to and from airports.
The International Association of Machinists and Aerospace Workers District 141M, the union representing the mechanics, said they have worked without pay raises since 1994. The union could try to walk out in a week, when a 30-day cooling off period is scheduled to end, Reuters said. Transport Topics
FedEx Ground Lowers Fuel Charge
Following similar moves by its airline and rivals, FedEx Corp. said Friday it will lower the portion of its ground shipment rates tied to fuel costs.The charge will drop to 0.75% from 1.25% on Jan. 7 and will rely on an index to reflect fuel prices in the future. It will adjust the rate monthly starting Feb. 4, using a rounded average of the on-highway price for a gallon of diesel fuel published by the Department of Energy.
United Parcel Service Inc., FedEx Express and Airborne Inc. have already reduced charges tied to fuel and linked future changes to indexes, Bloomberg reported.
Based in Memphis, Tenn., FedEx is ranked No. 2 in the 2000-2001 Transport Topics 100 list. Transport Topics
(Click here for the full press release.)
Immigrant Pleads Guilty in Hazmat Case
An Iraqi immigrant entered a guilty plea Thursday to one count of fraudulently obtaining a federal identification document, as part of an alleged commercial driver license-for-bribes scam, the Associated Press reported.Alawi Al-Baraa confessed to paying a middleman $300 to get him a CDL in December 1999 that would allow the bearer to transport hazardous materials. The money allegedly went to a former Pennsylvania Department of Transportation license inspector.
When he is sentenced in March, Al-Baraa faces up to eight months in prison. He currently is already serving a two-to-four year state prison term for aggravated assault, the AP said. Transport Topics
Customs Service Seeks to Search Outgoing Mail
The U.S. Customs Service is lobbying Congress for the authority to open and inspect suspicious mail leaving the United States without a search warrant, the Wall Street Journal reported.The added search powers, long coveted by law enforcement officials, worry the U.S. Postal Service because it would harm privacy and possibly impair international mail service. Those two things could hurt the already ailing USPS, the Journal said.
The Customs Service points out that it already can search incoming mail without a warrant, search people leaving the country and search packages carried by non-USPS companies like FedEx or United Parcel Service. Customs officials claim that such searches of mail could help in their crackdowns on money laundering and other conventional criminal activity, not just in the war on terrorism, the Journal reported. Transport Topics
Oil Price Rises as Norway Ponders Cut
The price of crude oil rose 2% on Friday on speculation that Norway will pledge to cut its output soon, bringing closer an agreement among oil producers to reduce overall oil output by 2 million barrels per day, Bloomberg reported.Assuming Norway, the third-largest exporter, agrees to cut production, it would pave the way for the Organization of the Petroleum Exporting Countries to trim its production by 1.5 million barrels a day at the start of next year. OPEC had said it would not cut unless non-members of the cartel agreed to reduce output by a total of 500,000 barrels a day.
At this point, Russia and Mexico have agreed to reduce production by a total of 250,000 barrels a day. Norway has not announced a decision, but has been reported wavering between cuts of 100,000 barrels and 200,000 barrels a day.
Brent crude oil for January settlement rose to $18.15 a barrel on the International Petroleum Exchange in London, Bloomberg said. In the U.S., crude oil for January delivery jumped to $18.50 a barrel in trading on the New York Mercantile Exchange. Transport Topics
Baggage Screening Plan Short on Funds
Many airports may miss Congress’ deadline to install baggage-screening devices because there are not enough funds to cover the cost of the machines, USA Today reported.Congress set a Dec. 31, 2002 deadline to have all baggage screened, but did not set aside any money to do the job, the paper said.
The Federal Aviation Administration estimates that it needs 2,000 more of the machines at a cost of $1 million each. Installing all the machines needed may cost another $4 billion to $5 billion, USA Today reported. Transport Topics
Rail Intermodal Down 2.7% in 49th Week
Trailers and containers loaded for intermodal service on the nation's railroads totaled 8,485,406 in the first 49 weeks of this year, running 2.7% behind the 8,718,620 loaded during the same period in 2000.Trailer loadings lagged the previous year by 9.8% continuing a trend that has been seen for the most the year. Containers were 0.6% ahead of last year's pace.
Intermodal is the segment of the railroad business most directly competitive with trucking, especially long-haul trucking. However, railroad and trucking companies often work together in intermodal service, with the railroad carrying the load for the long haul and trucks providing pick up and delivery service.
For the week ended Dec. 8, a total of 181,706 trailers and containers were loaded on rail cars, which was 0.7% down from the 182,970 loaded last year. Trailer loading trailed the previous year by 5.9% while container loadings were 1.8% ahead of the corresponding week in 2000. Transport Topics
Big Three Automakers to Close Plants
General Motors Corp. and Ford Motor Co. announced that they would idle plants next week because of slow sales and DaimlerChrysler AG will close one of its plants due to a parts shortage, Bloomberg reported.GM will temporarily lay off 4,050 workers next week for a few days because of weak auto sales, the Associated Press said. The furloughs will come at the company's Orion Township, Mich. car plant and a truck plant in Janesville, Wis. Production at both facilities will resume after the weeklong shutdown.
Ford will close part of an Avon Lake, Ohio factory that makes minivans, idling 900 of the facilities 2,200 workers until Jan. 2, Bloomberg reported. Ford will also shutter a plant in St. Thomas, Ont. that makes large sedans until Jan. 2, affecting 2,450 workers. Three thousand employees in Mexico will be let go until Jan. 14 at the Cuautitlan facility in the country.
DaimlerChrysler AG said that its Newark, Del. plant that makes the Dodge Durango sport-utility vehicle will close Monday because of a parts shortage. It will reopen after a week, Bloomberg reported. Transport Topics
Transportation Technologies Files for Chapter 11
Transportation Technologies, the parent company of Hackney & Sons and Kidron, has voluntarily filed for Chapter 11 bankruptcy protection, the company announced Friday.Hackney & Sons is a manufacturer of specialty truck equipment, particularly beverage trailers and emergency vehicles.
In release issued Friday, H.I.G. Capital, the owner of Transportation Technologies, said it views the bankruptcy filing as a way to improve the company’s financial standing. The filing is the end of the company’s yearlong effort to restructure, the release said.
The Audubon, Pa.-based company said it expects there to be little or no effect on its ability to meet financial obligations to its employees or to its customer base. Transport Topics
Trailer Reflector Exemption Expires
Reflectors or reflective tape are now required on all intermodal trailers, with the Dec. 1 expiration of an exemption that had been granted to steamship operators and some other groups.The Federal Motor Carrier Safety Administration regulation went into effect for the rest of the trucking industry June 1.
All trailers manufactured before Dec. 1, 1993, when reflective material became standard equipment, had to be retrofitted. Truck tractors built on or after July 1, 1997, also must display the material.
The Ocean Carrier Equipment Management Association, Intermodal Association of North America, Institute of Intermodal Container Lessors and Association of American Railroads had won the exemption because of the difficulty in scheduling time to retrofit the estimated 385,000 container chassis and 44,500 domestic intermodal trailers used in their service. The groups also said they had technical problems in affixing the red and white sheeting to their equipment.
Joni Casey, president of IANA, said all the members were notified that the deadline was coming and, to her knowledge, everyone has complied with it.
Federal studies have estimated the reflective markings help reduce the number of accidents in a year by 15%. A spokesman for American Trucking Associations said the rule "has proven its worth, and we stand behind it." Transport Topics
Small Business Survey Predicts 4Q Recovery
A survey of small business owners showed that most feel the economy will come out of its recession during the fourth quarter, the Wall Street Journal reported Friday.The survey, conducted by the National Federation of Independent Business, projected a 0.5% rise in the gross domestic product, a sign that perhaps the recession could be coming to an end, the Journal said.
Small business owners said that they were stepping up plans to add workers, increase inventory and purchase capital equipment in the fourth quarter, the survey said. However, an economist for the group, which represents small businesses, said the growth won't be enough to halt rising unemployment.
An increase in inventory and capital equipment purchases would be good news for the trucking industry, which thrives on factory orders and deliveries for business. Transport Topics
U.S. Trailmobile Bankrupt, Canadian Affiliates Are Not
The Canadian affiliates and subsidiaries of Trailmobile Trailer LLC are not a part of a bankruptcy filing made Thursday by the U.S.-based company, company officials said.Trailmobile Trailer filed for protection under Chapter 11 of the U.S. Bankruptcy Code, in an action that did not include Trailmobile Canada Limited or Trailmobile Trailer Canada Limited, a company press release said.
Tom Wiseman, president of TCL, said the company will continue to operate as a distinct separate legal entity. Transport Topics
(Click here for the press release.)
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