Briefs

Staff -- Purchasing, 5/6/2004

• Freight rates are on many buyers' minds today, as gas prices and increased demand push rates higher by the day. Purchasing's monthly business survey showed nearly 70% of buyers surveyed reporting increased freight rates in the month of March and a similar percentage expect rates to continue rising. Several other manufacturers cited increasing freight rates in earnings statements.
• The largest rail freight operator in the U.S. is asking some of its shippers to send cargo via any mode—but rail. Traffic congestion and crew shortages have forced UP to request that some of its customers in California and Texas send freight via truck. UP signed a one-month agreement with one of its major customers, United Parcel Service, under which UP will pay to put UPS packages on trucks that normally would run Union Pacific's express rail routes once a week each way from Los Angeles to New York, Dallas and Memphis. UP's crew shortages have been caused by a sharp upturn in retirees at the company after a federal retirement law for rail workers was changed.
• For the ninth consecutive year, growth in U.S.-based third-party, contract logistics services exceeded U.S. economic growth. Data compiled by Armstrong and Associates showed net revenues for 2003 grew by 6% to $32.9 billion following 7% growth for 2002. Of the 35 companies in Armstrong's core tracking group, 89% had increases in net revenues for 2003.