Briefs
Staff -- Purchasing, 11/18/2004
- American Airlines Cargo division announced an increase effective Nov. 1 in its fuel surcharge from 30¢/kg to 35¢/kg for most U.S.-origin international shipments and from 12¢/lb to 14¢/lb for U.S. domestic shipments. The fuel surcharge will also be adjusted, in local currency, for most non-U.S.-origin shipments, unless the adjustment is not allowed for regulatory reasons. The fuel index for American Airlines Cargo for the week ending Oct. 8 exceeded its trigger point for the second consecutive week, setting off the increase. The fuel index is based upon an average of the five U.S. jet-fuel spot markets.
- American Airlines Cargo also recently agreed to increase cooperation with DHL Expressto pursue additional opportunities in the marketplace. The new program will leverage the strengths of both companies to better serve customers in the freight and logistics industry worldwide. Highlights of the deal include the introduction of interline agreements that allow American to use DHL Express freighters to reach Eastern Europe, Africa and other parts of the world not directly served by American Airlines. American also is joining DHL Express Air Carrier Management Program, further extending the traditional business relationship the companies have had over the past two decades in markets worldwide.
- Mark Richards, vice president of Associated Warehouses Inc., was elected president of the Council of Logistics Management (CLM). The announcement was made at the organization's Annual Business Meeting held in October in conjunction with CLM's 2004 Annual Conference in Philadelphia.
- The Transportation Department reported that its transportation services index (TSI) for freight increased 0.3% in July from the June level of 126.6, following two consecutive monthly declines in April and May. The April Freight TSI of 127.1 is still the all-time high, revised from the 126.6 previously reported The June TSI for freight is 126.6, revised from the 125.7 previously reported. The July 2004 level of 126.9 is 6.9% higher than the July 2003 level of 118.7.
- Capital investment was the hot topic at the recent Freight Transportation Capacity Summit hosted by The Logistics Institute at Georgia Tech and Schneider National. "Transportation companies are heavy users of both labor and capital," said Christopher Lofgren, president and CEO of Schneider National, in the keynote address. "The health of our industry is dependent on these two factors. Capital spending across truckload, less-than-truckload and rail has fallen more than 30% since 1998 while growth in the U.S. labor pool has not kept up with driver demand." Chip White, executive director of The Logistics Institute, echoed those statements by saying, "The transportation capacity shortage is real and is producing significant challenges for carriers, shippers and drivers. Resolving this crisis is not the responsibility of carriers alone, but of the entire industry."
- The management of truckload carrier Arnold Transportation Services unveiled a plan in October to buy out the majority stake in the firm from Jefferies Capital Partners, with the help of U.S. Xpress Enterprises. In the proposed transaction, Arnold's current management would obtain 51% ownership of Arnold and control of the board of directors, while U.S. Xpress would obtain 49% ownership of Arnold, minority representation on the board of directors, as well as a three-year option to purchase management's interest. The management group would have a similar option to buy out U.S. Xpress' interest in Arnold after three years. Mike Walters, current president and CEO, will continue in this role after the buyout.
- The newly approved FY 2005 Homeland Security Appropriations Act includes $419.2 million in new funding to enhance border and port security activities, including the expansion of pre-screening cargo containers in high-risk areas. The Container Security Initiative got an increase of $25 million, the Customs and Trade Partnership Against Terrorism (C-TPAT) got an increase of $15.2 million in the new budget, and there was another $115 million for air cargo security to continue the research and deployment of screening technology started in FY 2004 and to increase air cargo inspectors.
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