Post by Charlestonguy on Oct 15, 2008 12:40:32 GMT -5
Transportation interests warned on gov't. intervention
The JOURNAL of COMMERCE
October 15, 2008
By Bill Mongelluzzo
MONTEREY PARK, Calif. -- Transportation interests should be wary of legislation that invites government involvement in their industry, a logistics executive said Tuesday.
Jim Butts, executive vice president of C.H. Robinson Worldwide, told the Los Angeles Transportation Club that when Congress proposes solutions to transportation issues, government intervention in the marketplace is often the result.
Third-party logistics providers this year are closely watching legislation sponsored by Peter DeFazio, D-Ore., involving fuel surcharges. The Trust in Reliable Understanding of Consumer Costs, or TRUCC Act, introduced in May, would require that 100 percent of the fuel surcharges levied on shippers be passed on to the company or owner-operator that purchases the fuel.
Similar legislation was sponsored in the Senate by Sen. Olympia Snowe, R-Maine.
Trucking companies tend to favor such legislation. They say that transportation brokers and non-asset based logistics providers that book freight on behalf of shippers sometimes keep all or part of the surcharge they add to the freight bill.
The brokers and 3PLs respond that they normally pass the surcharges on to truckers and therefore the legislation is not needed. Furthermore, they say, the bill would require a transparency in confidential freight rates that neither shippers nor brokers would welcome.
Legislation affecting the relationship between shippers and carriers or 3PLs and carriers often arises at times when fuel prices spike or there is a sudden change in capacity and demand for transportation services.
Congressional representatives, however, do not always have in-depth knowledge of the subtleties involved in the transportation marketplace, Butts said.
Shippers and carriers would best protect their interests by only doing business with third-party logistics providers that are financially sound so they can pay their bills promptly. The best 3PLs have expertise in all of the transportation modes, extensive contacts with carriers, access to capacity during the peak shipping season and efficient and reliable information technology systems, Butts said.
The JOURNAL of COMMERCE
October 15, 2008
By Bill Mongelluzzo
MONTEREY PARK, Calif. -- Transportation interests should be wary of legislation that invites government involvement in their industry, a logistics executive said Tuesday.
Jim Butts, executive vice president of C.H. Robinson Worldwide, told the Los Angeles Transportation Club that when Congress proposes solutions to transportation issues, government intervention in the marketplace is often the result.
Third-party logistics providers this year are closely watching legislation sponsored by Peter DeFazio, D-Ore., involving fuel surcharges. The Trust in Reliable Understanding of Consumer Costs, or TRUCC Act, introduced in May, would require that 100 percent of the fuel surcharges levied on shippers be passed on to the company or owner-operator that purchases the fuel.
Similar legislation was sponsored in the Senate by Sen. Olympia Snowe, R-Maine.
Trucking companies tend to favor such legislation. They say that transportation brokers and non-asset based logistics providers that book freight on behalf of shippers sometimes keep all or part of the surcharge they add to the freight bill.
The brokers and 3PLs respond that they normally pass the surcharges on to truckers and therefore the legislation is not needed. Furthermore, they say, the bill would require a transparency in confidential freight rates that neither shippers nor brokers would welcome.
Legislation affecting the relationship between shippers and carriers or 3PLs and carriers often arises at times when fuel prices spike or there is a sudden change in capacity and demand for transportation services.
Congressional representatives, however, do not always have in-depth knowledge of the subtleties involved in the transportation marketplace, Butts said.
Shippers and carriers would best protect their interests by only doing business with third-party logistics providers that are financially sound so they can pay their bills promptly. The best 3PLs have expertise in all of the transportation modes, extensive contacts with carriers, access to capacity during the peak shipping season and efficient and reliable information technology systems, Butts said.
