| |
Released: May 26, 2009
Big Advocacy Issues Remain In Trucking, Maritime, Rail
NASSTRAC’s Legal Counsel John Cutler identified the issues of highest importance to transportation at the recent NASSTRAC Logistics Conference & Expo in Orlando. In trucking, they are equipment sizes and weights, hours of service, NAFTA, West Coast port drayage, and bankruptcies. In maritime, they are Montreal Convention as replacement for Warsaw Convention, “Rotterdam Rules” as replacement for COGSA, and a general tightening of liability coverage. In rail, top issues are antitrust exemption for railroads, the possibility of captive shipper legislation being passed, railroad efforts to disclaim or limit liability for or duty to carry hazardous materials, and investment tax credit legislation being pursued by railroad industry. Infrastructure also continues to be the major topic of discussion.
Energy Markets Significantly Impact Supply Chains
Around the world, transportation industries rely heavily on oil for virtually all of fuel, and accounts for nearly half of world oil consumption. What does this mean for the U.S. transportation industry? The roller-coaster ride of fuel costs continue to be one of the top concerns of many supply chain managers as they try to manage costs. Mark Finley, General Manager, Global Energy Markets, BP America, Inc., shared key insights into the world of energy and oil markets as keynote at the recent NASSTRAC Logistics Conference & Expo in Orlando:
Finley covered the current share of energy consumed in 2007. Not surprisingly, oil is the world’s dominant energy source (at 35 percent), followed by coal at 29 percent and natural gas at 24 percent. He mentioned that hydro- and nuclear-powered energy are both around six percent, and pointed out that renewable sources of energy today are a very small percentage of the energy mix. So what can we expect coming up? Global energy consumption will continue, and is driven more by non-OECD countries (those that are not the strongest and richest), such as India and China. Oil will continue to dominate globally, and coal will gain in marketshare. Short-term oil market will see falling demand versus OPEC supply management. If the economy begins to stabilize and OPEC maintains discipline, inventories could fall later in the year. Diesel prices will likely follow crude oil. Longer term, volatility is likely to remain high.
Carrier Executives Highlight Transportation Challenges
Carrier executives underscored the hottest topics and biggest challenges at the recent NASSTRAC conference in Orlando. One panel discussion featuring CEOs of the nation’s leading over-the-road carriers helped to highlight the biggest challenges facing the industry. Moderated by John Langley, Ph.D, NASSTRAC’s Education Advisor and Professor of Supply Chain Management, Georgia Institute of Technology, this panel under¬scored the enormity of such challenges.
Doug Duncan, President and Chief Executive Officer, FedEx Freight, said that energy security, sustain¬ability, and lack of infrastructure investments are challenges of highest urgency. “Today, we at FedEx are running hybrid fuels in our fleets, we’re testing hydrogen fuel cells, and we’re solar-powering two of our service centers in California—and there are great things happening out there,” he said. “Those kinds of things we need to keep developing, and we cannot afford to lose momentum, even in the kind of economy we’re currently in.” He also mentioned that he’s pleased that the government now has funding ready to be invested in the infrastructure, but he’s concerned that there’s not currently a solid infra¬structure plan in how to best invest the money. “If you don’t know where you’re going,” he warned, “no road will get you there.”
Jack Holmes, President, UPS Freight, agreed with Duncan’s assessment, but added his observation that inventory levels are now at the leanest levels. “Shippers are looking for better reliability from their carriers and more visibility in their supply chain, and all at the lowest cost possible,” he said. “Carriers need to continually look at ways to make it happen.”
Wes Kemp, President and Chief Operating Officer, ABF Freight System suggested that “economy, economy, economy is the short-term focus, but we also want to keep long-term focus as well. Business volume in our network is of concern, as with all carriers, as well as ongoing fuel cost challenges. We need to continue to maintain long-term focus on the success of our companies.”
Michael J. Smid, President, YRC National Transportation suggested that the U.S. transporta¬tion industry thrives on density to keep pipelines full, flowing and moving: “You need to be aggressive, redesign yourself, your approach, and how to serve the marketplace. How can you listen and respond better?” He also said his concern is that it’s clear there is not adequate knowledge and understanding on Capitol Hill on important legislative issues. “Taxes related to carbon is top of mind, as well as the EPA greenhouse gas report recently released,” he said, “and legislation has the possibility of drastically and quickly changing the face of our industry.”
|
Industry News