According to the Energy Information Administration’s weekly fuel price report, the average retail price in the United States for a gallon of on-highway diesel jumped again this week, increasing five cents to total $2.840. This marks its highest level since Sept. 11, 2006. The national average has surged a total of 16.4 cents in the past two weeks.  Analysts linked the run-up in diesel prices to increased worldwide diesel demand, higher crude oil prices, and fears of shortages. Diesel is now 18.6 cents more expensive than during the same week in 2006.  The nationwide average of Ultra-Low Sulfur Diesel (ULSD) was also up 5.0 cents this week, to $2.853 per gallon.  Meanwhile, the price of West Texas Intermediate crude oil plunged $2.77 to $61.51 per barrel yesterday, which was 10.5 percent lower than at the same time last year.

Federated Department Stores Inc. reports that it will spend $100 million this year and next to support growth in its direct-to-consumer businesses, including Macys.com, Bloomingdales.com, Bloomingdale`s By Mail, MacysWeddingChannel.com and BloomingdalesWeddingChannel.com. The amount is part of Federated`s capital spending plans of $1.2 billion in 2007 and $1.1 billion in 2008.

“Our online sales continue to grow at a rapid pace as the national expansion of Macy`s and Bloomingdale`s attracts new customers to our stores, web sites and catalog," says Terry J. Lundgren, Federated`s chairman, president and CEO. "In particular, we are seeing exceptional growth in online sales in new Macy`s markets such as Illinois, Michigan, Minnesota, Missouri, Oklahoma, Texas and Utah.”

Lundgren says Federated’s online sales will exceed $1 billion next year. It reports $620 million in direct sales for last year. Direct includes catalog sales; Federated doesn’t break out online sales. "Supporting this pace of growth requires additional investment so we can scale up the volume of business while enhancing customer service, delivery efficiency and online site functionality," he says. Federated is No. 29 in the Internet Retailer Top 500 Guide.

The company will invest in a new 600,000-square-foot distribution center in Goodyear, AZ, which will serve primarily as the West Coast shipping point for macys.com. Construction will begin this spring and is scheduled for completion next spring. The facility will employ more than 500 full-time staff and is designed to accommodate further expansion of 400,000 square feet.

Federated also plans to spend on expanding its direct-to-consumer warehouse management system, improvements to the order management system and enhancements to Macys.com to support projected increases in customer traffic.

The company reports that these latest capital expenditures are in addition to $130 million that it spent this year and last in direct-to-consumer infrastructure improvements, primarily a new 600,000-square-foot distribution center to open later this month near Portland, TN, which will serve primarily as the shipping point for Macys.com to Midwestern, Southern and Central states.

In addition to its web sites, Federated operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the Macy`s and Bloomingdale`s brands. It has annual revenue of $27 billion.

Opponents Question Use Of SafeStat System

By Sean McNally
Senior Reporter, Transport Topics

A number of trade and interest groups criticized the Federal Motor Carrier Safety Administration for its strengthened requirements for new entrants into the trucking industry. They questioned the agency’s methodology, including use of the agency’s SafeStat system, and said the regulation would hurt business.

“FMCSA makes use of a scientifically challenged study to impute an increase in the safety risks associated with new entrant motor carriers,” the Owner-Operator Independent Drivers Association said. “The reliance on a faulty study that utilized SafeStat as a basis to promulgate this rule leads OOIDA to question if the agency is responding to a congressional mandate with a poorly conceived agenda.”

SafeStat, FMCSA’s program to analyze carrier crash and safety data, has been criticized heavily by a number of groups for data inaccuracies and incompleteness, as well as the formula it uses to analyze the data.

Advocates for Highway and Auto Safety said, while it “supports several of the specific proposals of the agency to strengthen the new entrant approval process, we continue to object to the agency’s ongoing use of . . .  the Safety Status Measurement System (SafeStat).”

Summing up its objections to the use of SafeStat, Advocates said it “continues to strongly disagree with FMCSA on its basic approach to new entrant application, grants of temporary registration and operation authority, and grants of permanent registration and operating authority following the 18-month probationary period for new entrants.”

The safety group also took issue with FMCSA’s decision not to require inspections and audits before companies begin operations. Advocates said it supports “a pre-authorization [safety audit] for U.S. motor carriers, coupled with a written proficiency examination to determine the knowledge and capabilities of new entrant motor carriers for complying with [federal rules].”

“The agency advances no rationale in the preamble of the proposed rule for why a pre-authorization [audit] is necessary for certain foreign motor carriers but is not needed for U.S. applicant motor carriers,” the safety group said.

The proposal, published in December, identifies 11 rules and regulations as “essential elements of basic safety management controls necessary to operate in interstate commerce and proposes that failure to comply with any one of the 11 regulations would result in automatic failure of the audit.”

Those elements include a drug and alcohol testing program, using disqualified drivers or equipment, or not having an inspection program.

One of the ways the agency identifies carriers to audit under the new entrant program is its SafeStat data analysis program.

American Trucking Associations said it had “concerns that the selection criteria for automatic failure and expedited action are unintentionally too specific for practical conduct of safety audits.”

In its comments, ATA said that nine of the 11 regulatory violations were “written with wording in singular form,” which could be problematic, “especially for large motor carriers.”

“There is a problem in using ‘single’ measures, [such] as ‘a driver’ or a ‘commercial motor vehicle’ in that [it] does not allow for proportion of scale,” the federation said.

OOIDA also criticized the rule as potentially damaging to smaller businesses.

“FMCSA’s proposal will increase the small business failure rate,” the driver group said. “This is not a proactive proposal, insofar as it is reactive and punitive to small businesses, in many cases owned and operated by one individual who is responsible for all facets of their operation from driving the truck to maintaining the proper back-office files.”

However, the Commercial Vehicle Safety Alliance said in comments to the agency that it is “a strong supporter” of the new proposed rule, which raises the standards for new entrants and specifies a number of violations what would disqualify new trucking companies from operating.

“We agree with and support the 11 regulatory violations FMCSA identifies in the [rule] as reflecting a clear lack of basic safety management control and that these violations should result in a failure of the audit,” CVSA said, but it noted that “those failing the safety audit, especially those not taking corrective action, need to have efficient and effective follow-up and/or enforcement action taken.”

FMCSA is “currently reviewing the comments that were submitted,” said agency spokesman Duane DeBruyne.

Airport intermodal expansions across the Midwest pave the way for regional economic growth.

Perry A. Trunick
Logistics Today,  March 2007

 The greater Kansas City area (www.kcsmartport.com) has the advantage of geography when it comes to potential logistics site selection decisions. Literally a few miles southeast of the geographic center of the continental United States, Kansas City, Kans., and Kansas City, Mo., straddle the Missouri River, leading to a unique regional perspective when it comes to economic development.

Bisected by the north-south Interstate Highway 35 and then by the east-west Interstate 70, the two Kansas Cities share a core transportation infrastructure. When Mark VanLoh, director, Department of Aviation Kansas City, Missouri (www.flykci.com), discusses projects at the airport, he sets them in the context of new developments in the other geographic quadrants as well. In one corner is the Richards-Gebaur Memorial Airport, a former air force base that is gaining a truck-rail intermodal operation. In another is the Gardner intermodal hub that will be developed by the Burlington Northern Santa Fe railroad (Ft. Worth, Tex.  www.bnsf.com). And then, there is the airport itself.

Trammell Crow Company (Dallas, Tex. www.trammellcrow.com), which was acquired by CB Richard Ellis (El Segundo, Calif.  www.cbre.com ) in 2006 for $2.2 billion, is developing a 640-acre business air park at Kansas City International Airport (KCI, www.flykci.com). Trammell Crow's airport services group comes to Kansas City with a track record of developing over 10 million square feet of office, industrial, air cargo and retail facilities in and adjacent to airports. It will begin work on 100 acres of the 640-acre site. The first building, says VanLoh, will be a "spec" 300,000 sq.-ft, distribution center.

City Council is considering a measure to provide up to $15 million in reimbursement to Trammell Crow for site improvements. The city would also extend utilities to the first 100 acres of the site. Putting the available space into context, VanLoh points out that KCI is three times the size of Los Angeles International Airport and over twice as big as Chicago's O'Hare.

In addition to space for growth, VanLoh describes the potential service area for the air park as extending from Denver to Columbus, Ohio, and from Minneapolis to Dallas, essentially the distance a truck can deliver over night from the airport.

The core infrastructure is "well thought out and well planned," says VanLoh. In addition to four interstate highways and rail service in the region, the airport itself has three runways with the capability to handle all current Boeing and Airbus aircraft, he says. They've even handled the Antonov AN124, the largest mass-produced aircraft. In addition, the green space barrier around the airport insulates it from residential areas and means there are no environmental or noise restrictions—no night curfews.

The business air park is not the only cargo project underway at KCI. VanLoh says another airport tenant is about to announce an expansion of its existing facility.

Elsewhere in the region, the former Richards-Gebaur Memorial Airport was transferred to the Port Authority of Kansas City in a $10.6 million sale. This paved the way for the 1,400-acre property to become an intermodal hub handling truck-rail intermodal shipments. The site already has a motor vehicle distribution center that opened in 2000. Now, CenterPoint Properties Trust of Chicago (www.centerpoint-prop.com ) is studying the property for further development. Hunt Midwest Enterprises (www.huntmidwest.com), operators of the underground distribution facility known as SubTropolis, is also looking at developing an underground facility at Richards-Gebaur.

Near Gardner, the Burlington Northern Santa Fe (BNSF) acquired 800 acres of a 1,000-acre site proposed as a logistics park. BNSF, which is building a 350acre intermodal facility on the site, selected the Allen Group (San Diego, Calif. www.allengroup.com) as the developer. Construction should be completed by the end of 2008. The Allen Group will develop the remainder of the site for warehouse and distribution operations.

The Allen Group is also responsible for planning the Dallas Logistics Hub, a 6,000-acre site, the International Trade and Transportation Center (700 acres in Shafter, Calif.) and the 480-acre MidState 99 Distribution Center in Visalia, Calif. Kansas City isn't the only airport intermodal development currently underway in the Midwest. The Columbus Regional Airport Authority (Columbus, Ohio, www.port-columbus.com) has partnered with Norfolk Southern Corp. (Norfolk, Va. www.nscorp.com) to develop an intermodal facility adjacent to the Rickenbacker airport. The Rickenbacker Intermodal Terminal should be operational in 2007.

"The new intermodal terminal will be a critical component of the logistics infrastructure in the Rickenbacker area that already includes an international cargo airport, a foreign trade zone, convenient highway access and millions of square feet of distribution and warehousing space," says Elaine Roberts, president and CEO of the Columbus Regional Airport Authority.

Among other developments, in 2006 Schneider National's Schneider Intermodal (Green Bay, Wis. www.schneider.com) opened an intermodal facility in Marion, Ohio, linking the Ohio River Valley to Kansas City. Near O'Hare International Airport in Chicago, BAX Global Inc. (Irvine, Calif. www.baxglobal.com) opened the 14-acre BAX Global Chicago World Freight Campus. The 228,000 sq.ft. facility is U.S. Customs bonded and complies with Technology Asset Protection Association (TAPA) standards. It is also Container Freight Station bonded. The facility includes 84 truck bays and a 100-foot clear span for domestic crossdock activities.