There are many different opinions on how involved the government should become in the freight shipping industry and transportation in the United States. First, there are tax issues. In its most recent report, The National Surface Transportation Policy and Revenue Student Commission, comprised of logistics industry figureheads, proposed a fuel tax increase to help support funding for interstate infrastructure.  The Bush administration is very much against any sort of tax hike.

Current administration officials explain that freight haulers need to use the current infrastructure more wisely; for example, spacing out volume by providing incentives for hauling freight during the night. The bottom line, the jury is out on tax increases, and any potential electoral candidate who supports them is risking quite a bit.

Government agencies are also focusing on truck safety. In doing so, they are paying attention to using new technologies to make sure truckers comply with rules. This regulation could further lessen the supply of freight which could come back to haunt us as we pull out of the recession and find lots of demand and a shrunken freight supply.

Stock market analysts lowered revenue and profit expectations for major domestic LTL freight cariers, including freight companies YRC Worldwide and SAIA.  Carriers are being hurt by increasing fuel costs and lower demand resulting from the growing recession.

“Carriers have experienced a marked decline in freight tonnage than most of us who follow the market had thought would happen,” explains analyst George Hattron. “We predict other carriers like Old Dominion and Con-way to demonstrate some weakness as well.”

The market will be shaky for trucking and freight shipping stocks in the near future, as the economy proceeds through the looming recession. Demand for freight will likely continue to be weaker than it has been in past years.  Fuel price increases could spell further divergences in the freight rates that carriers demand the the freight quotes that shippers receive.

With demand for LTL freight falling in early 2008, Carriers are being a lot more competitive with rates. Freight shippers, especially larger shippers, should be able to have their rates hold for this year.  This is especially so because carriers are concerned about lesser volume.

“I believe larger shippers should have more leverage in this environment,” says Tim Hutson, a freight consultant. “But smaller shippers would be best to work with a freight pooling company, because the carriers are still not happy about giving good rates to lower-volume shippers. This is even more so because fuel surcharges are so high.”

FedEx plans to launch next-business day domestic delivery services in China from June this year even though it has been in the Chinese market  for more than twenty years. Earlier, FedEx only had international express services in China. Its competitors DHL and UPS already offer domestic services. DHL launched its domestic services in China in 2004 and UPS in 2005.

FedEx’s President feels that they are in the ideal position to take advantage of China’s transition to a consumer economy through its rapidly growing middle class.  The business in China is being viewed more as a long term investment and the company is confident about the market because about 90% of its customers in China and abroad had been feeling the need for domestic services.

The regional hub in HangZhou, East China’s Zhejiang Province has already been set up by FedEx to make its domestic service operational. Hangzhou is ideally located in terms of air traffic capacity, reasonable operating costs, centrally located, good weather conditions, and a potential customer base. These are critical factors when it comes to setting up a logistics center.

The regional hub at the Xiaoshan International Airport has the capacity to initially sort up to 9,000 packages per hour.

An airport official says that FedEx and Xiaoshan International Airport have a three year agreement contract. There will be two night circular routes from Hangzhou. Roughly 200 cities will be covered by trucks throughout the country. The transport will be taken care of by domestic carrier Okay Airways with their three Boeing 737 freighters. 

Panther Expedited Services Inc., Seville has acquired Integres Global Logistics, a California based freight forwarding and logistics company. Integres offers shippers access to air and deferred air ground transportation networks. This acquisition will make Panther the largest full service premium logistics provider. Integres will also bring with it all its blue chip clients, giving Panther a much wider reach than before, especially on the West Coast. Seventy new people will join the 300-strong workforce at Panther. So in addition to ground expedite, Panther will now provide real time freight quoting, booking and shipment-tracking information from the time the shipment is picked up to delivery on all-important freight. The acquisition came about with Panther’s customers requesting Panther to handle more freight.

Panther is a portfolio company of Fenway Partners, New York, which is a middle market private equity firm. Fenway has extensive transportation and logistics experience and practice. In June last year, Panther filed documents with the Securities and Exchange Commission to make the company public.

Elsewhere, the Apollo Management Group, in its bid to buy transport company EGL Inc. has filed a suit against EGL. This is to stop the sale of EGL to a group of investors headed by its chief executive officer. Also, Apollo has upped its offer to $41 per share to buy EGL – this is a $1.9 billion offer. Last week, Apollo made a $ 40 per share offer to buy EGL. EGL CEO James Crane offered $ 38 per share at the same time. Now the problem is – the EGL board okayed the lower bid from Crane, which is why Apollo filed a suit against EGL.

Old Dominion Freight Line, a Less-than-truckload carrier has increased its base rates by 5.1% starting March 26, 2007. This rate increase will differ based on customer lanes and shipment distances. The increase implies restructuring that will allow increase in rates and minimum charges based on length of haul rather than the traditional “across the board” increases. Usually, the shorter the haul, the lower the impact of the increase. Even though each customer will have a different financial impact based on the lanes and distances their shipments cover, the overall increase is about 5.1%.

This increase in tariff is essential to balance higher costs as a result of new equipment, new service centers, the latest technology, insurance costs and wages and benefits, etc. In order to continue to provide customers with value in technology and graet performance they have now grown to depend on this increase is essential. 

Founded in 1934, ODFL Inc. is a less than truckload or LTL super regional carrier providing one to five day service, and next day and second day services. They offer premium expedited services, truckload services, truckload brokerage services, logistical solutions and container delivery to and from ten ports and distribution services. ODFL offers a range of unique products and services with complete nationwide coverage with the Southeast, South Central, Northeast, Midwest and West regions of the country. This includes 37 states with 100% full-state coverage and international services around the globe. ODFL has a tracking technology system, which lets its customers track the status of their shipments in real time.