Transportation Industry News

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Transportation Industry News

• Prepared by CPA International, Inc.
• September 2009

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House OKs Highway Plan

• The House of Representatives approved a
  three-month extension of the current highway
  funding law, over the objections of many House
  Republicans who said the bill was a step toward
  raising fuel taxes.
• But 86 Republican representatives bucked their
  party leadership and voted for a bill introduced
  by Transportation and Infrastructure Committee
  Chairman James Oberstar (D-Minn.) that would keep
  highway funding at current levels, under a
  procedure that required a two-thirds House
  majority.
• Almost half of the GOP members backed Oberstars
  bill current legislation expires when the
  federal fiscal year ends Sept. 30. Later in the
  week, House and Senate leaders also agreed to
  continue all federal government spending for 30
  days

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Velocity Express Sets Restructuring Plan

• Velocity Express Corp. said Thursday it has set
  an agreement with private equity firm ComVest
  Investment Partners III, in which a unit of
  ComVest would become a majority owner of the
  package delivery firm.
• The transaction would be done through an exchange
  of debt held by ComVest for equity in Velocity
  following the companys Chapter 11 bankruptcy
  filing that was made September 24th.
• With annual revenue of about 200 million,
  Velocity was the seventh largest package/courier
  company in the 2009 Transport Topics 100 listing
  of U.S. and Canadian for-hire companies.

4
Oil Falls Below 66 a Barrel

• Oil prices continued their recent slide, falling
  3 September 24th to close below 66 a barrel,
  Bloomberg reported.
• Benchmark light sweet crude futures fell 3.06,
  or 4.4, to close at 65.91 on the New York
  Mercantile Exchange, a one-month low, Bloomberg
  said.
• The Department of Energy said that inventories of
  crude oil, gasoline and distillate fuel, which
  includes diesel, all rose last week.

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Evergreen Boosts Europe-Asia Rates

• Evergreen Lines said it will apply its general
  rate restoration program to eastbound shipments
  starting Oct. 1 from Europe and the Mediterranean
  to the Far East, including Japan and Australia,
  and the Indian sub-continent.
• The rate increase for all cargo and commodities,
  including reefers and special equipment shipped
  from Europe to the Indian sub-continent and the
  Middle East, including the Red Sea and the Gulf
  is 100 per container.
• The rate increase for all cargo and commodities,
  including reefers and special equipment shipped
  from the Mediterranean to the Far East, including
  Japan and Australia, and the Indian sub-continent
  and the Middle East, including the Red Sea and
  the Gulf, is 150 per container.

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Rail, Intermodal Traffic Fall for Week

• Intermodal rail traffic in the United States fell
  12.4 September 25th from the same week a year
  ago, the Association of American Railroads said
  in its weekly report.
• Total intermodal volume dropped to 205,137 units,
  from 234,286 last year. Containers fell 6.2 to
  172,974 units, while trailer volume plunged 35.5
  to 32,163 units.
• Freight rail traffic, which excludes intermodal
  traffic fell 9.6 compared with last year to
  282,341 carloads, AAR said.
• Railroad volume is considered an important
  economic indicator. Intermodal traffic, which
  tends to be higher-valued merchandise than bulk
  commodities, uses trains for the long haul and
  trucks for the shorter distance at either end of
  the trip.

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DHS Releases 380 Million for Ports, Transit,
Security

• U.S. seaports are in line for another 150
  million in federal security grants that can be
  used for worker identification measures and other
  projects, as part of 380 million in new Recovery
  Act grants released Sept. 23 by the Department of
  Homeland Security.
• DHS Secretary Janet Napolitano said the funding
  includes 72 million for transit agencies that
  can be used to beef up security in stations,
  high-density tunnels and for bridges. That comes
  at a time when security alerts have gone out this
  week for mass transit systems, after the arrest
  of suspects reportedly planning a terrorist
  attack.
• DHS said the 150 million in additional funding
  for its port security grant program is to
  protect critical port infrastructure from
  terrorism enhance maritime domain awareness and
  risk management capabilities and support the
  implementation of the Transportation Worker
  Identification Credential -- a tamper-resistant
  biometric credential issued to workers who
  require unescorted access to secure areas of
  ports and vessels.

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OOCL Bumps Rates Up

• Hong Kong-based Orient Overseas Container Line on
  Sept. 22 announced another in a series of rate
  restorations.
• Effective Oct. 1, all dry and reefer shipments
  from Japan to Hong Kong, Macau and South China
  will incur an additional fee of 50 per 20-foot
  equivalent unit, 100 per 40-foot equivalent unit
  and 100 per 40-foot high cube.
• The effective date is based on shipment on-board
  date at the first loading port

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Small Fleets, Owner-Operators Still Struggle

• Owner-operators and small fleets havent seen any
  sign of a freight demand or price recovery, but
  those who survived said they have done it through
  hard work, perseverance and bold decisions such
  as expanding a fleet even as the recession hit.
• Todd Spencer, executive vice president of the
  Owner-Operator Independent Drivers Association,
  which says it has 160,000 members, said he
  believes the number of trucks run by
  owner-operators and small carriers has dropped
  15 to 20 in this recession.
• Gary Roadhouse, general manager of United Motor
  Freight Inc., Seattle, also isnt seeing any
  improvement in trucking. In fact, its getting
  worse,
• The rates are going down, freight is going down
  and revenue is lower, Roadhouse said. Whoever
  in government who likes to say were recovering
  is wrong.

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FedEx Raises Rates as Profit Falls 53 Percent

• FedEx reported a 181 million profit Thursday for
  its fiscal quarter ending Aug. 31 that was down
  53 percent from a year ago, but the carrier also
  saw improving demand in its express business and
  announced a rate increase for expedited shippers.
• FedEx said the 5.9 percent price increase for
  domestic and U.S. export express shipments would
  take effect Jan. 4, 2010, and the fuel surcharge
  would be reduced at the same time by two
  percentage points, making the rate hike
  effectively 3.9 percent.
• FedEx saw its express revenue decline 23 percent
  in its fiscal first quarter compared to the same
  period a year ago, and the FedEx Express
  operating profit fell 70 percent to 104 million,
  largely because of declines of more than 20
  percent in yield. But domestic express volume
  actually grew slightly and FedEx said a 4 percent
  drop in International Priority shipping was
  better than the company had expected.

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FedEx Raises Rates as Profit Falls 53 Percent

• Those results were offset by weakness in the
  FedEx Freight trucking segment, where revenue
  fell 27 percent and shipments per day declined 14
  percent compared to last year. Both figures
  marked a slim improvement on the previous fiscal
  quarter, but yield in the LTL business fell 14
  percent after an 11 percent decline in the
  previous three-month quarter, suggesting prices
  in the domestic trucking market are still
  falling.
• But FedEx also defied the downward trends in its
  FedEx Ground parcel segment, where the operating
  profit actually grew 7 percent to 209 million
  and volume was almost flat, slipping just 1
  percent.

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New Penn Teamsters Approve Concessions

• Unionized drivers at less-than-truckload carrier
  New Penn Motor Express, facing possible shutdown,
  approved concessions sought by financially
  troubled parent company YRC Worldwide, the
  Teamsters union and the carrier announced.
• The package agreed to by the Teamsters includes a
  5 percent wage cut on top of a previous reduction
  and an 18-month moratorium on pension fund
  contributions that the company says would save
  some 45 million a month in costs.
• "As employee owners and stakeholders, our union
  workforce has made difficult decisions and
  demonstrated their commitment to achieving
  long-term success for YRC Worldwide. Revisions to
  the contract enable the company to strengthen its
  financial position," said Mike Smid, president of
  carrier YRC and chief operations officer of
  parent YRC Worldwide.

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Union Pacific Building New Intermodal, Logistics
Terminal

• Union Pacific Corp. said its new Joliet (Ill.)
  Intermodal Terminal will support customer growth
  by boosting international and domestic container
  capacity and improving rail traffic efficiencies
  in the Chicago area, the nations largest rail
  center.
• Once it comes on line, customers from across UPs
  network will benefit from Joliets annual
  capacity of 500,000 ocean-going containers.
• Intermodal traffic has grown substantially over
  the last decade, particularly in the Chicago
  area, and the new capacity will allow UP to
  continue pursuing opportunities in the rail-truck
  market, the company said in a statement.

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Transportation Industry News

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  please contact
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  or via Email cpa.intl_at_snet.net for details.