A.M. Executive Briefing - Mar. 15
This Morning's Headlines:
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FedEx Ventures Into Ocean LCL Arena
FedEx has brought former executives from APL and Sea-Land Logistics on board as it works to create a less-than-containerload logistics service focusing on Asia-to-North America shipments. It follows United Parcel Service's January announcement that it will start a service for LCL shipments from Hong Kong, a service soon to be expanded to other parts of the world.FedEx Global Logistics President and CEO Gary Gilbert, who was once Sea-Land Logistics' president, said FedEx wants to provide worldwide logistics service and that "containers are a customer-driven need." Next week, ACS Logistics President Rod Miller will become FedEx Global Logistics vice president of international operations; ACS Logistics is a unit of APL.
According to Lazard Freres & Co. research analyst Greg Burns, many trade operations lacking complete logistics capabilities are now attempting to expand services, either with internal growth or through acquisitions, as with Ocean Group's purchase of Mark VII and Deutsche Post's acquisition of Danzas and AEI. Journal of Commerce Online (03/15/00); Chirls, Stuart
E.P.A. Plans to Order Cuts in Diesel Fuel Sulfur Levels
The Environmental Protection Agency's plans for great reductions in sulfur limits for diesel fuel have sparked debate between state air pollution officials and the petroleum industry over the size of the cuts.Extrapolating from a draft report from California's South Coast Air Quality Management District, the State and Territorial Air Pollution Program Administrators estimated that particulate diesel emissions would lead to 125,000 added cancer cases nationwide over a lifetime of exposure. The officials' group is calling for a 97% sulfur reduction, but oil refiners say there is no technology that could make diesel that clean and, if such technology were created, high costs would close some refineries and lead to shortages.
The American Petroleum Institute volunteered to cut sulfur levels from the current 500 parts per million to 50, with a national average of 30, at a cost of 5 to 6 cents per gallon. The state officials' desired limit of 15 parts per million would be 10 to 12 cents per gallon more, said an API spokesman.
The officials' estimate of 125,000 extra cancer cases is based on the SCAQMD's data saying trucks, buses, and cars are responsible for 90% of the Los Angeles region's cancer risk, 70% of which is caused by soot from diesel engines. The estimate assumed U.S. cities and suburbs have 50% of the Los Angeles soot level, and rural areas 10%.
But the SCAQMD's data was questioned by Health Effects Institute President Daniel S. Greenbaum, who said most studies say diesel presents a probable or likely cancer risk in humans, rather than a certain risk. The Health Effects Institute is funded by EPA and heavy industries. New York Times (03/15/00) P. A14; Wald, Matthew L.
VW Truck Division Head Says 'Interested' in Scania
Volkswagen is interested in the Swedish truckmaker Scania, whose merger with Volvo was vetoed Tuesday by the European Commission, "but it depends on the conditions," VW commercial vehicles unit Chairman Bernd Wiedemann said. AFX European Focus (03/15/00)Janklow, Patrol Tell Truckers to Heed Load Limits
South Dakota Gov. Bill Janklow said truckers must obey load limits in the state, adding that carrying somewhat smaller loads will lead to much lower road-repair expenses later. The Highway Patrol's motor carrier enforcement commander said the patrol will be enforcing the weight limits that, under state law, can be posted by the state or counties from Feb. 15 to April 30. Aberdeen (S.D.) American News (03/14/00) P. 8ACops Make Stops for Safety
The Washington State Patrol's three commercial-vehicle enforcement officers in Clark County are seeing increasing truck volume; the weigh station on Interstate 5 sees some 8,000 trucks daily.Due to the risk of crashes, truckers tend to be cooperative in safety inspections. Frank Fague, a supervisor of commercial-vehicle enforcement officers in Clark and four other counties, said most truckers are "very professional" with "a good attitude" and, in his opinion, "better than what they have been."
The most common reason for taking trucks out of service is brake problems. The patrol said 65,992 trucks were inspected in the state last year, with 10,652 trucks and 4,573 drivers taken out of service. The Columbian (Vancouver, Wash.) (03/14/00) P. B1; Branton, John
EU's Monti Says National Market Study of Volvo/Scania Merger Was Necessary
Dismissing criticism of the European Commission's decision to examine Volvo and Scania's merger plans on a national rather than pan-European basis, competition commissioner Mario Monti said an EC investigation found it unrealistic to expect customers to respond to a 5% to 10% price rise by buying trucks in other countries.Commercial-vehicle customers usually buy within their countries, and "the truck and its services" are "a package," he said. Monti also said country-specific truck and bus specifications keep parallel imports minimal.
The combined group would have dominated the Scandinavian and Irish markets for heavy trucks and city buses as well as the markets for inter-city coaches in Scandinavia and touring coaches in Finland and the United Kingdom, the investigation found. AFX European Focus (03/14/00)
Bill May Fund New Customs Agents for Ambassador Bridge
Despite expansion of approaches, inspection booths, and plazas at the Ambassador Bridge between Michigan and Ontario since Nafta passed, there has been little growth in the number of Customs and Immigration and Naturalization agents there, leading to truck delays. That could change thanks to a U.S. Senate bill backed by Sen. Spencer Abraham (R-Mich.), which would pay for 375 more Customs and 375 more INS agents along the border between Canada and the United States.But the bill could be held up by a clause that would repeal Section 110 of a 1996 immigration law that requires INS registration of all entry and exit of the United States by people who are not U.S. citizens. Representatives of states along the Mexican border are against the bill because of this repeal clause.
If not repealed, Section 110 would go into effect March 30 of next year, possibly halting traffic at the bridge, which lacks booths for registering people bound for Canada. Crain's Detroit Business (03/12/00) Vol. 16, No. 10; P. 23; Kosdrosky, Terry
Meeting on Junction Yard's Future Postponed
A planned Feb. 28 meeting regarding the Junction Yard, a Detroit switching station where the state and city would like to establish an intermodal transfer site for multiple users, was canceled with no new date set.Junction Yard owners CSX and Norfolk Southern were to make a presentation to the transportation departments of Michigan and Detroit at the meeting; the railroads required additional time with engineers to prepare the presentation, according to the state DOT. Crain's Detroit Business (03/12/00) Vol. 16, No. 10; P. 29; Kosdrosky, Terry
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