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Transportation News Bulletins - Logistics

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China brands US ‘protectionist’
Friday, 06 November 2009 00:00

China on Friday accused the US of protectionist and biased trade policies less than a week before President Barack Obama’s first visit to Beijing.

In a stinging rebuke to Washington, China’s commerce ministry promised to take measures to protect its domestic industry after the US slapped anti-dumping duties on $2.6bn of Chinese steel pipe imports. The duties are part of a growing roster of trade conflicts between the two countries, despite a high-level meeting last week in China aimed at reducing tensions.

“China resolutely opposes such protectionist practices and will take steps to protect the interests of our domestic industries,” Yao Jian, ministry spokesman, said on its website.

“The US should give objective consideration to the fact that the fundamental problem of the US industries in question is the fall of demand brought about by the financial crisis.”

The decision by the US Commerce Department, which imposed tariffs of up to 99 per cent on some Chinese steel pipes, follows a move earlier in the week by the US, European Union and Mexico to file a formal complaint at the World Trade Organization against Beijing’s restrictions on exports of specialized raw materials. Last month the Obama administration levied 35 per cent tariffs on tires made in China.

In response, the Chinese have opened probes into US exports of poultry on grounds of safety and into cars and car parts because of the state aid those industries have received.

Lawyers in Beijing say that the government has raised the issue of state aid to push its case for China to be awarded market economy status, which would make it harder for the US to bring anti-dumping cases against Chinese products and has long been a sore issue in Beijing. “They are trying to show that every country’s markets have imperfections,” said a US trade lawyer in Beijing.

In its statement on Friday, the Chinese commerce ministry said: “We hope that the US will set aside its biases and act as quickly as possible to recognize China as a market economy.” At the US-China meeting in Hangzhou last week, Gary Locke, the US Commerce secretary, promised to set up a panel to consider the issue.

“We should be aware of this kind of trend of western countries using the WTO and free trade as an excuse to challenge us,” said Mei Xinyu, a researcher at a think tank connected to China’s commerce ministry. “Western countries adjust their own trade policies depending on the market needs of their own interest group.”

At the meeting last week, China agreed to allow US imports of pork and to relax restrictions on importing wind power components. However, Paulo Soares, head of the Chinese operations of Suzlon, the Indian wind power group, said the new rules would make little difference. “The big companies already have installed manufacturing operations and established supply chains, so it is not going to change anything,” he said. (Financial Times), 11/6/2009

Lower Benefits and Little Hiring for Transport Industry
Thursday, 05 November 2009 00:00

Only 22% of transportation companies plan to increase hiring in the six months to April 2010 says a study by Grant Thornton LLP. More than half (59%) will reduce bonuses. At Dupré Logistics drivers will be paid hourly instead of by the mile.

For its 700-plus drivers, Dupré Logistics has initiated a pay strategy shared by few companies in this economic climate—paying its drivers by the hour. It’s an initiative the company says was implemented to produce better schedules, more quality team members and safer drivers. Dupré Logistics has stressed the new pay structure does not function as a cost-cutting measure, but rather a quality control initiative.

“At Dupré Logistics, we strive to recruit and retain the best team in the industry,” said Tom Voelkel, president. “The hourly compensation structure has proven beneficial in terms of safety, human resources and retention of our drivers. It’s an initiative with benefits that far outweigh the cost to our bottom line.”

The Dupré move contrasts with the results of a survey of transportation financial officers conducted by Grand Thornton LLP. Of the CFOs surveyed, 38% believe the US economy will improve during the period, making transportation more pessimistic than other industries (national average was 49% expecting an improved economy). Among the steps companies are taking, nearly one third (32%) said they expected to reduce health care benefits and 21% were reducing 401(k) matches.

Transportation CFOs did have a more optimistic view of their companies' financial prospects. Half said they expected improvement over the coming six months vs. a national average of 45%.

Most transportation companies expect to keep headcount steady (63%) with only 16% expecting further reductions.

According to the survey, only 13% of transportation CFOs expected the US economy would come out of the recession by the end of 2009. One third (34%) said the US would emerge from the recession in the first half of 2010, and 41% said the second half of 2010.

Logistics Today, 11/5/2009

Importers/Exporters Support Clean Air
Thursday, 05 November 2009 00:00

In a letter to New York Mayor Michael Bloomberg and Newark Mayor Cory Booker, 29 national and state associations representing importers, exporters, logistics industries and service providers offered their support for the ports' clean air efforts, but pointed out results can be achieved without enacting new federal regulations.

Responding to the two mayors' joint announcement supporting the Port of Los Angeles Clean Trucks Plan and the mayors' call for amending the federal trucking rules in the Federal Aviation Administration Authorization Act (FAAAA), the groups said neither the Port of Los Angeles model nor the amendments to the FAAAA would achieve the desired goal.

Stating that they were “writing to express our grave disappointment in your October 19th announcement of support for the Port of Los Angeles’ Clean Truck Program,” the groups said, “We fully support efforts by the ports, including the Port Authority of New York and New Jersey, to improve their air quality. However, there is absolutely no need for a change to longstanding federal law to achieve this goal, nor any justification on outlawing independent owner-operator trucking firms from serving our nation’s ports.”

“The objective of the Port of LA’s Clean Trucks Program that is both controversial and illegal under federal law is its design to eliminate the independent owner-operators from the port trucking business,” said the letter. “We strongly oppose this objective, and we oppose amending the Federal Aviation Administration Authorization Act (FAAAA), as you have suggested, to achieve it. We are also disappointed that you have taken such a position without consulting with the Port of New York and New Jersey’s customers, and without considering the fact that such a change would in the end make the Port of New York and New Jersey much less competitive than it is today.”

Members of the groups signing the letter pointed out they “move a substantial amount of the nation’s international commerce through America’s marine ports and along the surface transportation network of roads and rails.” The harbor trucking industry is an integral component in the supply chains of US industry they said.

“We have an interest in making sure that the harbor trucking industry operates safely, efficiently and in an environmentally responsible manner. Many of our members are actively working with transportation providers to replace as quickly as possible the older harbor trucks serving marine terminals around the country with highly innovative clean equipment.” 

The port users also pointed out the mayors had noted in their press release, “over 5,500 new clean burning vehicles are on Southern California’s roads, moving nearly 70% of all cargo—three years ahead of schedule to meet emission reduction targets.” The group said this was a significant achievement that occurred without a change in federal law.

The letter added that, “The argument that port trucking services should be exempted from federal preemption in order to improve air quality is fallacious, and has nothing to do with clean air.” They were referring to a concession requirement in the Los Angeles program that would have banned any harbor trucking company from using independent owner-operator drivers, in favor of employee drivers. That issue has been at the heart of a number of legal challenges.

The US District Court for the Central District of California determined that the ports' concession plans regulate interstate trucking "prices, routes, and services" and thus were preempted by the FAAAA, the letter points out. This was affirmed by the US Court of Appeals for the 9th Circuit.

The letter notes, “The Port of Long Beach has settled their lawsuit with the American Trucking Associations. According to Port of Long Beach Executive Director Richard Steinke: 'The settlement ‘clears the way for the Port and the trucking industry to move forward, together, with a program that has been highly successful in reducing air pollution.' He went on to further say: 'The NRDC’s real objection to our program has nothing to do with clean air. By aligning itself with the Teamsters, who have been very public about their campaign to unionize port truckers nationwide, the NRDC is pursuing an agenda beyond air quality.'”

The groups conclude saying, “We support continued efforts to improve air quality at America’s ports. These improvements will be achieved quickly without any change to federal law. Already in Southern California, the Clean Trucks Program has resulted in the removal of 5,500 dirty trucks from service and replaced them with new and cleaner equipment. A change to federal law or the inclusion of an employee mandate is not required to advance this goal.”

They ask the mayors to, “reconsider your position on this issue. It is time for us to work together in the common objective of improving air quality at our nation’s ports, and to stop this poorly disguised effort to put law-abiding independent owner operators of clean trucks out of business.”

Logistics Today, 11/5/2009

U.S. Postal Service Hikes Shipping Prices
Wednesday, 04 November 2009 00:00
Priority Mail increases 3.3 percent on average; flat rate envelopes drop 5 cents

Prices for Priority Mail will increase an average of 3.3 percent on Jan. 4, 2010, the U.S. Postal Service announced Wednesday. A range of higher prices will also go into effect in January for Express Mail, Global Express Guaranteed, Express Mail International, Priority Mail International, Parcel Select and Parcel Return Service.

The changes are not all upward. The domestic Priority Mail Flat Rate Envelope retail price will fall from $4.95 to $4.90. And the Priority Mail Small Flat Rate Box will remain at $4.95.

To encourage greener, more efficient shipping, the Postal Service is introducing cubic volume-based pricing for large volume commercial Priority Mail shippers. Customers who ship small dense, spaceefficient packages will receive a financial incentive through a new, tiered pricing option.

Another innovation coming in January will be a Priority Mail half-pound price, based on distance, only in the Commercial Plus category. And, a new Priority Mail Flat Rate padded envelope measuring 9.5 x 12.5 inches will be available exclusively for Commercial Plus shippers. This envelope is specially designed for jewelry, electronics and other delicate goods.

“We have put together a range of creative and innovative products and services for our customers,” said Robert Bernstock, president of mailing and shipping services. “With these new offerings, the Postal Service is reinforcing the value of Priority Mail as the right product at the right time,” he said.

Prices for First-Class Mail, Standard Mail, Parcel Post and other mailing services products will not change in 2010, with the cost of a First-Class Mail stamp remaining at 44 cents.

Online discounts will be available. Online costs will be, on average, 5 percent less than retail for Express Mail and 5.7 percent less for Priority Mail. Online savings for international shipping will be 10 percent less than retail for Global Express Guaranteed, 8 percent less for Express Mail International and 5 percent less for Priority Mail International.

A complete listing of 2010 prices is available at under the Jan. 2010 Price Change link. The new prices and product innovations are pending Postal Regulatory Commission review.

Journal of Commerce, 11/4/2009

Cap-and-Trade Would Be Costly for Trucking, ATA Official Windsor Warns at Hearing
Monday, 02 November 2009 00:00

WASHINGTON—A cap-and-trade climate bill would dramatically increase the cost of diesel fuel by as much as 88 cents a gallon, an American Trucking Associations official told a Senate committee last week.

Barbara Windsor, ATA’s first vice chairwoman, said an economy wide cap-and-trade system would require refineries to buy carbon allowances, and “the costs associated with obtaining these carbon allowances will be passed on to the fuel consumers in the form of higher prices.”

Windsor told the Senate Environment and Public Works committee on Oct. 29 that “a major petroleum supplier to the trucking industry has advised that diesel fuel costs could rise by up to 88 cents.”

Testifying on behalf of ATA, Windsor also said the cap-and-trade legislation the committee is considering would not significantly reduce carbon emissions from trucking because carriers cannot decide to avoid buying fuel.

“Cap-and-trade will not only increase the price of diesel fuel, it also will increase the volatility of diesel prices, as a fluctuating carbon price is added to an already volatile fuel price,” Windsor said. “Volatile fuel prices make it very difficult for trucking companies to accurately predict their future expenses as they sign freight delivery contracts.”

Windsor’s concern over fuel increases was echoed by the head of the nation’s fourth-largest petroleum refiner, who told the committee that compliance with proposed cap-and-trade legislation could cost U.S. oil companies and consumers as much as $67 billion a year.

“The implications of this legislation are devastating for the American people and the American refining and petrochemical industries,” Bill Klesse, chairman and CEO of Valero Energy Corp., told the same committee in a hearing a day earlier, on Oct. 28.

Klesse said the bill, which would limit carbon emissions of mostly large stationary sources such as electrical power plants and oil refineries, would drive domestic gasoline and diesel production offshore, resulting in a loss of American jobs, and will “impose huge costs” on U.S. energy consumers.

However, Democrats, while agreeing fuel prices would rise, said the increases would be less dramatic. Some estimated fuel would increase by 13 cents to 15 cents a gallon.

The three days of hearings on the bill, which included testimony from more than 50 witnesses, mostly supporters of the legislation, was characterized by often contentious debate among committee members.

The hearings were kicked off by the bill’s chief author, Sen. John Kerry (D-Mass.).

In his remarks, Kerry said the transportation sector would not be regulated by the climate change legislation but conceded that it would cause an increase in energy costs.

Kerry said the bill, the Clean Energy Jobs and American Power Act of 2009, would regulate 7,500 stationary businesses that release roughly 75% of all carbon emissions in the United States.

“Agriculture is exempt,” Kerry testified at an Oct. 27 hearing of the committee. “Transportation is exempt. Small business is exempt.”

Responding to comments made by Sen. James Inhofe (R-Okla.), an opponent of the legislation, Kerry acknowledged that the bill would raise energy prices.

“Are there some costs?” Kerry asked. “Yes, sir, there are some costs.”

Kerry said that while many studies showed limiting greenhouse gases would lead to higher energy prices, “none of them factor in the cost of doing nothing.”

The legislation is designed to reduce greenhouse gases, create green jobs and lessen U.S. dependence on foreign oil, said Sen. Barbara Boxer (D-Calif.), the bill’s co-sponsor and chairwoman of the committee.

At press time, it was unclear if co-sponsors Boxer and Kerry had the votes needed for it to pass the full Senate. Sen. Max Baucus (D-Mont.) said as the hearings began Oct. 27 that he had “serious concerns” over the bill; Republicans are attempting to slow the bill and are threatening to boycott Boxer’s plan to begin a committee mark-up as early as this week.

Brett Vassey, president of the Virginia Manufacturers Association, told the committee that the cap-andtrade legislation allows politicians to choose “winners and losers” in the economy because it allows some energy users permits to emit more carbon than others.

That would cause some manufacturers to reduce production levels to meet their emission targets and put them at a disadvantage globally.

“Is this really fair for to the American consumer or to our industry?” Valero’s Klesse asked. “As diesel fuel prices increase, what happens to the jobs in railroads and trucking?”

Several committee Republicans appeared to be pushing a change to the bill that would add financial incentives to build nuclear power plants as a way to increase low-carbon energy production nationwide.

But Boxer said the bill would only cost the average U.S. consumer an extra 30 cents a day.

Transport Topics, 11/2/2009

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