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Transportation News Bulletins - Logistics

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DOT Stimulus Payouts Rise $347 Million in Week
Friday, 14 August 2009 00:00

Total disbursements for infrastructure projects approach $1.5 billion by Aug. 7

Stimulus money is rolling out of the Department of Transportation at ever-increasing amounts to pay for initial infrastructure projects, as DOT spending jumped by $347 million in the latest week.

That pushed the total it has paid out so far to $1.494 billion through Aug. 7, up from $1.147 billion a week earlier. The latest disbursement total is nearly triple the $523 million DOT had paid out by the first week of July.

But the actual amounts spent only reflect payment of bills coming in from states, which in most cases happen after engineering or construction work is already done. Therefore they understate how much economic activity the stimulus is generating.

The department said through the first week of August it had approved $24.1 billion in project applications from the states, half the total it will eventually allocate.

Some DOT programs that will spend large sums are just now receiving grant applications, including a $1.5 billion discretionary account that DOT Secretary Ray LaHood says will fund a lot of port projects.

Much of the money spent so far went through the Federal Highway Administration for fast-start road and bridge repairs, but that account also covers some freight rail, port and trucking facility projects at states’ discretion. Some DOT funds have also gone into airport and transit construction projects.

FHWA said it has allocated $17.4 billion or 65 percent of its total Recovery Act money. Of that, it said through Aug. 7 it paid out $785 million, and its project approvals were backing nearly 3,000 active projects around the country worth $8.3 billion. FHWA has also authorized another 3,400 projects to begin, DOT said.

DOT also said four states and 17 municipalities chose to transfer highway funds totaling $267 million to projects administered by the Federal Transit Administration. In all, FTA has awarded 470 grants worth $4.3 billion for projects including passenger rail and bus services.

Separately, DOT will soon receive applications for $8 billion in Recovery Act funds for high-speed passenger rail projects, some of which include improvements to existing freight rail lines that also serve Amtrak passenger trains.

Across all agencies, spending authorizations under the $787 billion stimulus law were up to $200 billion through Aug. 7, according to the Web site. Disbursements were at $77.1 billion or nearly 10 percent of the projected total.

Those range from payroll tax cuts to extended unemployment benefits to special one-time payments for Social Security and railroad retirees and the “cash for clunkers” vehicle purchase incentives that are helping perk up auto manufacturing.

Other federal stimulus actions include Coast Guard approvals for rehabbing some railroad bridges over navigable waterways, and grant awards by the Environmental Protection Agency to help buy cleaner burning locomotives, commercial trucks, harbor tugs and city buses. FHWA also spends on equipment under a congestion mitigation program, and both it and the EPA grant funds were bolstered by the Recovery Act.

National Railway Equipment of Mt. Vernon, Ill., said it received orders in July for 14 of its ultra-lowemission locomotives, worth $21.4 million. NRE officials said a third of that total or about $7 million was in stimulus money for an FWHA program that CSX Transportation tapped to buy five of those units.

Journal of Commerce, 8/14/2009

Union Chief Apologizes on STB Nod
Thursday, 06 August 2009 00:00

UTU president hopes controversy won’t “derail” Elliott’s nomination

The head of the United Transportation Union sent a quick apology to key senators after members of the Senate Commerce, Science and Transportation Committee erupted in anger over a union claim of influence in the nomination of Daniel R. Elliott to lead the Surface Transportation Board.

The committee approved Elliott among a number of Obama administration nominees on Aug. 5, clearing them for confirmation by the full Senate. But the panel added a “hold” on Elliott’s choice so they could first deal with a UTU statement indicating the influence of its political action committee led to his nomination.

That hold would prevent the full Senate from voting on Elliott; if it is not removed in the days before an Aug. 10 recess begins, the Senate could not consider him for the STB until it returns next month. But the episode also left a cloud hanging over what had appeared to be a sure nomination.

“I want to profusely apologize,” UTU International President Malcolm Futhey said in his letter to committee Chairman Jay Rockefeller, D-W. Va. and ranking Republican Kay Bailey Hutchison of Texas. “It is my sincere hope that my badly chosen words will not derail his confirmation.”

Futhey wrote that a July 7 union Web site article to members was “not in any way appropriate.” In it, he appeared to claim credit for the influence of UTU’s PAC for President Obama choosing UTU officials Joseph Szabo to lead the Federal Railroad Administration and Elliott to become chairman of the STB.

That PAC influence suggestion, Futhey said, “is certainly not an accurate reflection of the facts surrounding his nomination.” A UTU spokesman earlier said no PAC money from the union or other PACs went to Obama in his presidential campaign. Futhey sent his letter to the senators late on Aug. 5.

The committee voted to recommend Elliott and the other nominees to the full Senate with no dissenting votes. But Hutchison suggested and Rockefeller agreed that his approval would be subject to a “hold” by them, pending resolution of the union influence claim.

The controversy arose minutes before the scheduled vote. Rockefeller said he saw what committee members described as a UTU press release about the agency nominations just before the committee’s voting session got under way.

Sen. Johnny Isakson, R-Ga., said he discussed it with the chairman, and Hutchison distributed copies of the UTU report as the session opened so members would have it in hand before they voted on Elliott’s nomination.

Isakson then read from the UTU report. He praised Elliott’s qualifications but said he was concerned about “a statement that so blatantly referenced the leveraging of influence to cause an appointment to be made.”

Rockefeller agreed about what he called “this UTU idiocy,” and demanded an apology from Futhey.

A week earlier in Elliott’s nomination hearing, Rockefeller had repeatedly pressed the nominee to help captive shippers in their disputes with railroads, saying the 1980 deregulation law had been unfairly applied by regulators to benefit railroads and disadvantage shippers that have limited transportation options.

At that time, only Rockefeller and Hutchison asked questions of Elliott and other nominees, and no one mentioned the earlier UTU web site article mentioning its PAC.

Journal of Commerce, 8/6/2009

China to become world's leading exporter
Wednesday, 05 August 2009 00:00

China is expected to overtake Germany as the world’s top goods exporter by value this year, according to the World Trade Organization (WTO).

WTO figures show that China’s goods exports totaled US$1.43trn last year, slightly below Germany’s $1.46trn.

The organization also predicted that global trade would plunge by 10% this year, the largest decline in six decades; although the rate of decline was now easing and Asian countries were leading a recovery in the global trade.

China, which achieved a GDP growth of nearly 8% in the second quarter, remains the top destination for foreign direct investment, followed by the US and the remaining three Bric countries—Brazil, Russia, India—according to a survey by the US Conference on trade and investment.

International Freighting Weekly. 8/5/2009

Controversy Flares Over STB Nomination
Wednesday, 05 August 2009 00:00

Senate panel approves Elliott, but vows hold on nomination over union influence

An angry flare-up over a union influence claim led the Senate Commerce, Science and Transportation Committee to both approve Daniel R. Elliott III’s nomination to head the Surface Transportation Board and to put a “hold” on it.

Chairman Jay Rockefeller, D-W.Va., denounced a claim by the United Transportation Union of leveraging influence with the Obama administration from its political affairs committee for the appointments of Elliott at STB and Joseph Szabo to head the Federal Railroad Administration.

The UTU is the largest rail labor organization, representing mostly train conductors along with some other railroad workers. The FRA oversees rail safety, while the STB regulates economic issues including rail mergers and disputes with freight shippers.

Rockefeller called the union claim “this UTU idiocy,” said the statement was “totally inappropriate, absolutely inexcusable” and said UTU International President Malcolm Futhey should “write a letter of apology to this committee.”

Committee members were quick to praise Elliott’s qualifications and say they did not think he was involved. But at the suggestion of ranking Republican Kay Bailey Hutchison of Texas the panel approved all the nominees with the understanding that Elliott’s approval would also be under a “hold” by Hutchison and Rockefeller. That prevents full Senate approval until the union influence issue can be resolved.

Earlier, as the committee prepared to vote on a long list of nominees for various senior jobs in the Obama administration, including the STB slot and several other transportation posts, Hutchison passed out to other members what she said was a “troubling” UTU press release so they could have it “as they are deciding about their vote on Dan Elliott.”

Sen. Johnny Isakson, R-Ga., read from it a quote by Futhey saying the Elliott and Szabo selections are “a tribute to the political influence” of that union, “which flows from the UTU PAC. We have good reason to expect the president to reach into UTU ranks for other appointments in the future.”

Isakson said while Elliott “appears to be eminently qualified,” the UTU statement was “totally inappropriate and it reflects poorly on the nominee, who probably didn’t know the statement was made.”

Still, he said, it “troubled me as a member of the committee to receive a statement that so blatantly referenced the leveraging of influence to cause an appointment to be made.”

Rockefeller said “I would certainly hope people didn’t feel that Dan Elliott had anything to do with this. In the many years that I’ve been in this body that is one of the most embarrassing, ridiculous, selfaggrandizing, inappropriate, harmful—and a few other words—press release I can remember.”

A UTU spokesman clarified that the Futhey statement was not a press release but a posting on the group’s Web site, to emphasize the need for union members to participate in its PAC.

“The UTU is well aware that the president's selections of Joe Szabo and Dan Elliott were based on the merits of these two individuals and not PAC contributions,” said spokesman Frank Wilner. “Indeed, President Obama did not accept PAC contributions from the UTU or any other PAC during his recent campaign,” Wilner said.

He also said a letter addressing the issue would soon be sent to the committee.

Journal of Commerce, 8/5/2009

Polo Ralph Lauren Profits From Shifting Air to Ocean
Wednesday, 05 August 2009 00:00

New shipping strategy out of Asia yields gains in gross margins for retailer

Clothing retailer Polo Ralph Lauren said Wednesday it earned a $76.8 million profit despite falling sales in its fiscal first quarter in part through savings on logistics and transportation costs.

The savings included shifting some of its imports from air freight to ocean transport, which meant taking the goods earlier to account for the longer delivery cycle, the New York-based company said.

Although that raised inventory costs, “due to continued improvements in the planning calendar and to the order flow to factories, we are very comfortable with the cost benefit of pursuing supply chain and logistic savings opportunities that still allow us to maintain the currency of our global inventory,” Roger Farah, president and chief operating officer, told investment analysts on a conference call.

Farah said the company set up “an air traffic controller concept in Asia so that at the last minute we can decide depending on need and depending on what stage of manufacturing we’re in whether to get the savings off of boat or whether air shipments are needed. And it allowed us to shave dramatic costs out of the transit line of the margin.

The company earned $76.8 million in the three months ending June 27, down 20 percent from the same quarter a year ago, on an 8 percent drop in revenue, to just beyond $1 billion.

But Polo Ralph Lauren also improved its gross profit margin compared to last year’s first fiscal quarter and said it was partly the result of greater logistics operating efficiency.

“Supply chain initiatives … have allowed us to move more product via lower-cost modes of transportation and have therefore yielded freight savings on our inbound inventory,” said Tracey Travis, chief financial officer.

Journal of Commerce, 8/5/2009

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